Earnings season is underway once more, and this week, the Big Tech companies move front and center.
The start of 2024 hasn’t brought a lot of favorable headlines to that industry, as Google, Microsoft, Amazon, and others have announced mass layoffs. In the first four weeks of the year, tech companies, led by the giants of the industry, have laid off some 25,000 employees. Now, investors want to know how the financials look.
Stock prices for The Magnificent Seven (Apple, Amazon, Alphabet, Nvidia, Meta, Microsoft, and Tesla) have largely been on the rise this year, with Microsoft, Meta, and Alphabet setting new records (and Microsoft joining the $3 trillion market cap club). So how do analysts expect the earnings to shake out? Here’s a look.
Microsoft
Artificial intelligence (AI) will be top of mind for investors, as Microsoft recently launched its Copilot chatbot on PCs as well as for businesses, allowing the company to monetize its AI efforts. The Street is looking for earnings of $2.78 per share and revenues of $61.1 billion in its most recent quarter, which would be a nearly 16% increase—its best performance in almost two years. Investors will also want an update on growth at the Azure cloud unit, which surpassed expectations in its last earnings report by a significant margin. Keep a close eye on its guidance for future quarters, as that is a good indicator of management confidence in its current path.
Reports after the market close on Tuesday
Alphabet
Wall Street is expecting the parent company of Google and YouTube to report earnings of $1.60 per share and revenues of $85.28 billion in the fourth quarter. That’s a big jump from a year ago, when the company reported $1.05 per share and revenues of $76 billion in Q4 2022.
Investors will be hoping to hear more about Gemini, the company’s latest push into generative AI as well as an update on the state of the advertising market and its current stability.
Reports after the market close on Tuesday
Amazon
Analysts are expecting to see an explosive jump in earnings compared to a year ago, as Amazon’s cost-cutting efforts begin to pay off. Wall Street is looking for earnings of 80 cents per share in the most recent quarter (versus 3 cents a year ago). It is also expecting revenues of $166 billion in the most recent quarter (about $17 billion more than for the same period a year ago). And bulls like to point out that Amazon has so far beaten both earnings and revenue estimates every quarter of the last fiscal year.
Advertising revenue and Amazon Web Services, two major growth areas for the company, will continue to be key areas of focus for investors, as will online retail sales, especially as these numbers will be from the holiday quarter.
Reports after the market close on Thursday
Meta
Meta shares increased by 194% in 2023 as the company cut costs (and employees) and saw user growth and higher engagement. So investors are expecting big things from the earnings this week. Consensus among analysts calls for earnings of $4.93 per share in the most recent quarter (versus $1.76 a year ago) and revenues of just over $39 billion.
Meta’s AI efforts will be an area of extreme interest for investors; as will China, which is a growing source of revenue for the company.
Reports after the market close on Thursday
Apple
Apple shares haven’t performed as well as many of its other Big Tech peers, and the launch of the Vision Pro on Friday hasn’t exactly made investors leap with joy so far. Tim Cook will look to turn that around, and the company is expected to report notably stronger earnings than a year ago, with a consensus of $2.10 per share in the most recent quarter (compared to $1.88 for the same period in 2023) and projected revenue of $118 billion, a $1 billion increase.
Investors will be less curious about the Vision Pro and more interested in how sales are performing in China. If Apple can show that that market is solid, some of the worries that have kept the stock in neutral so far this year could be eased.
Reports after the market close on Thursday
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