• February 9, 2023

Weekly Preview: Earnings To Watch this Week (AAPL, AMD, FB, MSFT, TSLA)

AAfter stocks hit record highs earlier in the week, stocks closed for the most part lower on Friday, suggesting for some that some level of fatigue has crept in. This is especially true despite the number of positive earnings reports from S&P 500 companies for the fourth quarter that have been released so far. While Wall Street analysts generally believe the trend will continue, including bullish results for the first quarter, investors still seem cautious.

The Dow Jones Industrial Average fell 179.03 points on Friday to close at 30,996.98, a loss of 0.6%. The blue chip index was put under pressure by a 9% decline in IBM (IBM), which reported fourth quarter sales results that missed Street’s estimates. Intel (INTC), which lost 7% during the session, also dragged the Dow down despite a better-than-expected fourth quarter result. The S&P 500 Index closed 11.60 points to 3,841.47 while the Nasdaq Composite Index added 12.15 points to close at a record high of 13,543.06.

The Nasdaq rally was sponsored by Apple (AAPL), Microsoft (MSFT) and Facebook (FB), which should show profits in the coming week. But as mentioned earlier, some tiredness is creeping up on the market. Part of the reason is due to a combination of factors. Aside from reports of various lockdown measures to combat the COVID-19 pandemic, particularly in Europe, Dr. Anthony Fauci, director of the National Institute for Allergies and Infectious Diseases, during the White House briefing Thursday that the vaccines currently on the market may be less effective at fighting new variants of the virus.

Additionally, the U.S. Senate has shown opposition to President Joe Biden’s new $ 1.9 trillion tax incentive round, which includes not only cash payments of $ 1,400 to households, but additional payments for unemployment and money to distribute COVID-19 vaccines. Some Republicans don’t support the bill and have criticized the price tag. But there are also some Democrats, including Senator Joe Manchin, who has criticized the size of the proposed stimulus checks.

With apparent political opposition on both sides, the market is currently unsure whether the president’s economic targets will become law. This is likely to put pressure on cyclical stocks (energy, finance, materials, etc) – those that could benefit from additional stimulus.

Meanwhile, this week, the profits of mega-tech companies are coming into focus. These reports, as well as their outlook for 2021, are being watched closely as their sales and earnings growth is less reliant on fiscal stimulus. Here are the names to keep an eye on.

Modern micro devices (AMD) – Reports after close of trading Tuesday, January 26th

Wall Street expects AMD to make 47 cents per share on sales of $ 3.02 billion. This compares to the same quarter last year when it achieved earnings of 32 cents per share on sales of $ 2.13 billion.

What to Remember: Expectations for AMD are high, given the strong fourth quarter results and positive guidance issued by rival Intel last week (INTC), which recovered not only in the data center business, but also in PC sales. These trends bode well for AMD, which has steadily gained market share from Intel in both categories. The market anticipates minimal disruption to AMD’s business despite the pandemic. AMD stocks are up 5% over the past week and are up 1.2% year-to-date. The stock’s popularity was driven by several factors, most notably AMD’s execution, which includes topping the street’s sales estimates for five of the past six quarters. The company is well positioned for this again. Revenue and earnings metrics aside, investors will focus on metrics like shipment growth and management comments on expectations for the first quarter and full year 2021.

Microsoft (MSFT) – Reports after close of trading Tuesday, January 26th

Wall Street expects Microsoft to make $ 1.64 per share on revenue of $ 40.18 billion. Compared to the same quarter last year, earnings per share were $ 1.51 on revenue of $ 36.91 billion.

What to Know: Trends in work and home learning continue to drive demand for Microsoft services. This is reflected in the high demands made in the fourth quarter in the productivity and business as well as intelligent cloud segments. However, the strength of Microsoft’s Commercial Cloud business was and is what drove the stock’s strong performance over the past year. In the last quarter, Azure revenue was up 48% year over year – a slight slowdown from the 50% growth in the fourth quarter. Wall Street continues to see the company’s prospects for double-digit revenue growth in fiscal 2021 largely positive due to the momentum of Azure. On Wednesday, investors want evidence that the Azure and Microsoft (a zoom (ZM) Competitors) can push the company further up.

Apple (AAPL) – Reports after the end, Wednesday January 27th

Wall Street expects Apple to make $ 1.40 per share on revenue of $ 102.76 billion. This compares to the same quarter last year when earnings were $ 1.25 per share on sales of $ 88.5 billion.

What to Remember: This quarter is all about sales and sales of the iPhone 12 in all of its variants. Analysts have praised the device, calling it the most significant iPhone upgrade super cycle since the iPhone 6 was launched with a larger screen. The iPhone 12, however, is seen as more important not only for its 5G functions, but also for functions such as the globally oriented LIDAR sensor that is used in the Pro models. Overall, unlike previous models, there are few “incremental” upgrades, not the device. It’s more revolutionary. The question is whether sales in the holiday quarter will meet such high expectations. However, Apple is more than just a phone business. The company’s service business, which now accounts for nearly 22% of total revenue, rose to a record $ 14.5 billion in the last quarter, beating the consensus of $ 14.12 billion.

Facebook (FB) – Reports after close of trading Wednesday, January 27

Wall Street expects Facebook to make $ 3.19 per share on revenue of $ 26.34 billion. This compares to the same quarter last year when earnings were $ 2.56 per share on revenue of $ 21.08 billion.

What to Know: Facebook stock has seen an impressive upward trend over the past week, up 12%, suggesting that market concerns about the weakness of the digital advertising market, especially amid the pandemic, have disappeared . The company was a model of persistence, beating consensus expectations for the past 11 quarters. Overall, the company has only missed earnings estimates once in the past five years. Over the past year, FB shares have increased in terms of fears political risks caused by its dominance. However, if the company can see a sharp increase in daily active users and monthly active users while delivering a positive revenue forecast, the stock should continue to perform like it did in past sessions.

Tesla (TSLA) – Reports after close of trading Wednesday, January 27

Wall Street expects Tesla to make $ 1.00 per share on sales of $ 10.32 billion. This compares to the same quarter last year when earnings were 41 cents per share on sales of $ 7.38 billion.

What to Note: Tesla shares have been dispelling doubts that the company can achieve the returns it achieved in 2020 in 2021 for as little as 20% the year before. While skeptics continue to poke fun at the stock’s high valuation, Tesla’s focus has been on executing its strategy. With four double hits (revenue and profit) in a row, few companies have seen better results last year, including reported fourth-quarter deliveries of 180,570 for and deliveries of 499,550 vehicles for 2020. And there are no signs of slowing down like that the company has vehicle registrations in California that are up nearly 63% year over year in the fourth quarter. The electric vehicle pioneer needs to stay on the accelerator next week as its 2021 delivery guidelines are likely to determine where the stock is headed in the near future.

The views and opinions expressed here are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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