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Earnings Week Ahead: Tech Titans Take Center Stage Amid Geopolitical Unrest, Rates

Published 20-04-2024, 01:35 pm
  • Alphabet, Tesla, Meta, Amazon, and Microsoft will report their first-quarter figures in the coming week.
  • Despite overall positive expectations, Tesla stands as an exception.
  • These reports are due at a time when investors are bracing for the Federal Reserve's high-interest rate stance amid rising geopolitical tensions
  • Readers of this article can use the MASTERPRO coupon for a spectacular discount on their InvestingPro subscription by clicking on this link.
  • Five tech giants step into the earnings spotlight next week, namely: Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Tesla (NASDAQ:TSLA), Meta Platforms (NASDAQ:META), Amazon.com (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT).

    A cloud of doubts hangs over the market going into the blockbuster week as investors brace for the Federal Reserve to maintain interest rates higher for longer, a backdrop further complicated by rising geopolitical tensions in the Middle East.

    While InvestingPro anticipates positive results on the EPS front for most aforementioned companies, Tesla remains an exception.

    What to Expect From Tech Earnings Next Week?

    The earnings season has been a mixed bag so far. Goldman Sachs (NYSE:GS), Charles Schwab (NYSE:SCHW), and Morgan Stanley(NYSE:MS) (NYSE:MS) all delivered impressive results. However, Bank of America (NYSE:BAC) and Netflix (NASDAQ:NFLX) fell short of expectations, despite exceeding initial forecasts.

    Here's a glimpse into what to expect from some of the key reports:

    • Meta (META): Analyst forecasts on InvestingPro suggest Meta's first-quarter report could boast the highest revenue growth.
    • Amazon (AMZN): The e-commerce giant might lead the pack in terms of profits.
    • Tesla (TSLA): Bucking the trend, Tesla's figures are expected to show declines in both revenue and profits.

    Using insights from InvestingPro, let's delve deeper into what the market expects from each company

    Alphabet Earnings: Forecasts Signal Strong Growth

    Google's parent company, Alphabet, is set to report its first-quarter earnings on Tuesday, April 23rd. Analyst forecasts available through InvestingPro indicate positive signs:Earnings Report

    Source: InvestingPro

    • Revenue: A projected 12.7% annualized growth in total revenue, reaching around $78.682 billion.
    • Earnings per Share (EPS): An anticipated EPS of $1.50, signifying a 28.2% increase compared to Q1 2023.

    While exceeding analyst expectations has been a trend for Alphabet, investor sentiment has been mixed. Despite strong overall performance, some divisions like advertising haven't met expectations. This has prompted a shift in focus towards areas like cloud computing.

    Forecast Vs. Earnings

    Source: InvestingPro

    Alphabet recently announced leadership changes within its Artificial Intelligence teams and workforce reductions. It will be interesting to see how these changes impact the company's future performance.

    Tesla Faces Headwinds as Earnings Approach

    Elon Musk's Tesla is facing strong headwinds as it prepares to report earnings on April 23rd. Data available to InvestingPro subscribers paints a less-than-optimistic picture.

    Upcoming Earnings

    Source: InvestingPro

    Revenue and EPS Forecasts to Decline:

    • Revenue: Analysts predict a 4.4% annual drop in quarterly revenue, with a projected figure of $22.301 billion.
    • Earnings: There have been 12 downward revisions to Tesla's EPS (earnings per share) forecasts in the past 90 days. The current consensus estimate sits around $0.50, which represents a significant 41.2% decline compared to the same period in 2023.

    Several factors are likely contributing to the lowered expectations:

    • Delivery Slump: Tesla reported an 8.5% drop in vehicle deliveries for the first quarter.
    • Cybertruck Delays: The highly anticipated Cybertruck remains undelivered.
    • Workforce Reductions: Tesla recently laid off over 10% of its workforce worldwide, hinting at a sales crisis.

    Overall, the outlook for Tesla appears challenging as the company prepares to report its first-quarter earnings.

    Forecast Vs. Earnings

    Source: InvestingPro

    Following the most recent miss in Q4 2023, Tesla's stock price plummeted over 12% the next day. This volatility adds to the pressure as they approach their first-quarter 2024 results. Furthermore, Tesla's stock has already experienced a significant downturn in 2024, currently down around 40%.

    Meta Platforms Prepares for Strong Q1 Earnings

    Analysts positive about Meta Platforms' upcoming first-quarter earnings report on April 24th. InvestingPro forecasts paint a bright picture, predicting a 26.2% surge in revenue, reaching a total of $36.156 billion.

    Earnings Report

    Source: InvestingPro

    The optimistic sentiment is further bolstered by 20 upward revisions to analysts' EPS (earnings per share) forecasts. The current consensus expects a whopping 97.3% increase in EPS, hitting $4.34 compared to just $2.20 reported in the same period last year.

    Meta, the company behind Facebook, WhatsApp, Instagram, and Threads, has consistently outperformed expectations in the past year, surprising analysts with impressive quarterly results. Investors have also responded positively in at least three out of the last four reports.

    Forecast Vs. Earnings

    Source: InvestingPro

    The integration of Artificial Intelligence (AI) into advertising solutions and a significant improvement in this segment's performance have fueled optimism for Meta. This positive trend comes despite ongoing tensions with data protection authorities, which even prompted the temporary suspension of their Threads social network in Turkey. Meta's upcoming earnings report and guidance will provide further clarity on the potential impact of these issues.

    In the meantime, Meta's stock price has soared by nearly 42% year-to-date, reflecting investor confidence in the company's continued growth and profitability.

    Amazon Poised for Strong Q1?

    E-commerce titan Amazon is gearing up to release its first-quarter earnings on April 25th, and analysts are raising the bar in anticipation. Over the past three months, InvestingPro analysts have significantly increased their EPS (earnings per share) expectations for the company. They now predict an EPS of $0.84 for the January-March period, a staggering 171% jump compared to $0.31 reported in the same period of 2023.

    Upcoming Earnings

    Source: InvestingPro

    The bullish sentiment extends to revenue forecasts as well. The consensus expects Andy Jassy-led Amazon to report an 11.85% increase in total revenue, reaching around $142.5 billion. This marks a significant growth from the $127.4 billion reported in the first quarter of 2023.

    Amazon has a proven track record of exceeding analyst expectations in recent quarters, building a strong track record of success. This positive trend, coupled with the upward revisions from analysts, fuels optimism for the upcoming report.

    Forecast Vs. Earnings

    Source: InvestingPro

    The markets have also historically reacted favorably to Amazon's earnings releases. Last year, for example, the stock price rose significantly after the company's quarterly results. This revision highlights the strong position Amazon is in and the high expectations surrounding its upcoming earnings report.

    Microsoft Gears Up for Upbeat Earnings Report

    Microsoft, the world's largest company by market cap ($3 trillion), is on track for a positive earnings report. Analyst consensus data from InvestingPro predicts a 15.1% increase in total revenue for the company's third fiscal quarter of 2024, reaching around $60.85 billion.

    Earnings Report

    Source: InvestingPro

    Analysts are particularly bullish on Microsoft's performance in Artificial Intelligence (AI) and cloud computing, key revenue drivers for the company. InvestingPro subscribers can see that earnings per share (EPS) forecasts have been revised upward by 27 analysts in the last quarter. The current consensus anticipates EPS to land around $2.84, representing a nearly 16% year-over-year increase.

    Microsoft has a history of exceeding analyst expectations on quarterly results. However, investor reactions have been inconsistent. In two of the last four reports, Microsoft's stock price fell the day after earnings releases. This could be attributed to concerns about a potential slowdown in the cloud business and rising development costs for AI initiatives.

    Earnings Report

    Source: InvestingPro

    Microsoft's upcoming report will shed light on whether the company can maintain its positive momentum. It will be crucial to see if they can address investor concerns while demonstrating continued growth in AI and cloud computing.


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    Disclaimer: The author does not own any of these shares. This content, which is prepared for purely educational purposes, cannot be considered as investment advice.

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