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

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?/h2

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 /h2

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:

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.

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.

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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