Price Information and Economic Data
The article contains valuable insights into the current financial landscape.
The price information and economic data in this article are sourced from Bloomberg.
Quarterly Results Preview
The first lot of Wall Street’s mega-cap tech companies report in the coming week. We preview what to expect from Tesla, Alphabet, Meta, and Microsoft’s quarterly results.
Tesla (TSLA)
“Tesla (TSLA)” is a popular electric vehicle company known for its innovative technology and sleek designs.
– Elon Musk founded Tesla in 2003 with the mission of accelerating the world’s transition to sustainable energy.
– The company’s focus on electric vehicles (EVs) has revolutionized the automotive industry.
– With a market capitalization of over $800 billion, Tesla is one of the most valuable companies in the world.
Tesla continues to push the boundaries of innovation and sustainability, making it a leader in the EV market.
Tesla’s Challenges Ahead
Tesla enters the reporting season out of favour amongst investors as several headwinds build for the company. As Bloomberg data reveals (below), analysts estimate revenue declined by 3.4% in Q1, with EPS estimated to drop by 26.4% to $0.54 per share.
Tesla Sales Slowdown
Tesla’s sales have slowed, while profit margins are eroding as the business deals with higher costs and the impacts of a more aggressive pricing strategy. Tesla has lowered prices to defend market share from legacy automakers and challenger brands in China. However, the cuts have failed to boost sales volumes and defend market share.
Recent Delivery Data
Recent delivery data underwhelmed expectations and revealed the first year-over-year decline since 2020. Deliveries in Q1 declined to around 387,000, with the impacts of supply disruptions – including snarled supply chains – as well as weaker demand for Tesla’s cars causing the fall.
Following the delivery data
After Tesla announced that it would be laying off 10% of its staff, with CEO Elon Musk explaining the decision was made to lower costs, boost productivity, and prepare the automaker for its next growth phase. Despite the announcement, Tesla‘s share price closed lower on the day it was made.
Analysts’ Sentiment on Tesla Stock
Analysts are as bearish on Tesla stock as at any point in the last two years: the company boasts a consensus _“sell”_ rating. However, the consensus price target remains a premium to current prices, at $187.36 per share. Tesla reports after the closing bell on Tuesday, April 23, 2024.
Alphabet (GOOGL)
Alphabet Inc. is an American multinational conglomerate with a focus on technology products, including online advertising technologies, search engines, cloud computing, software, and hardware. Initially founded as Google in 1998, the company reorganized in 2015 and made Alphabet its parent company.
It is among the leading technology companies known for its innovation and market dominance. Some of its popular products and services include the search engine Google, Android mobile operating system, YouTube video platform, and the Google Cloud Platform.
> “The mission of Alphabet is to organize the world’s information and make it universally accessible and useful.”
Alphabet’s stock is traded on the NASDAQ stock exchange under the ticker symbols GOOGL and GOOG. It is one of the highly valued and influential companies in the tech industry, with a significant impact on various aspects of people’s daily lives.
Alphabet
Alphabet is expected to deliver strong growth in the first quarter, supported by the performance of the company’s cloud services business. According to analyst consensus data compiled by Bloomberg (below), Alphabet is tipped to report EPS of $1.52 in Q1, a 30.1% increase, underpinned by revenue of $US79.1 billion.
Advertising Revenue and Cloud Services Growth
Advertising revenue remains Alphabet’s biggest segment, with a resilient US consumer supporting ongoing strength in sales for the quarter. However, the company’s cloud services are the major growth driver, with analysts expecting a more than 25% increase in revenues for Q1 as the tech giant executes its artificial intelligence strategy.
Investors will be keenly watching Alphabet’s guidance and whether it is and can continue to execute on advances in AI strategy, particularly whether the company can generate increased revenues while keeping operating expenses and capital expenditures at moderate levels.
Alphabet has indicated that it will continue to invest in innovative technologies, with a focus on AI and machine learning.
The tech giant aims to enhance its existing products and services through the integration of AI, which could drive growth and deliver value to shareholders.
– This approach aligns with Alphabet’s long-term vision of building a more intelligent and connected world.
Analysts’ Outlook on Alphabet Stock
Analysts remain very bullish on the outlook for Alphabet stock, boasting a consensus buy rating. Out of 65 brokers, 55 recommend buying the stock, while the remaining suggest holding. The consensus price target of $168.77 is at a premium to current valuations.
Alphabet reports after the closing bell on Tuesday, April 23, 2024.
Alphabet will announce its financial results for the first quarter of 2024. It is expected that the company will exceed analysts’ earnings projections.
– Analysts predict that Alphabet will report strong revenue growth
– The tech giant has been investing heavily in new technologies and innovation
– Investors are eagerly awaiting the earnings call to hear about the company’s future plans and strategy
Meta Platforms (META) is a company focused on connecting people around the world through its social media platforms like Facebook, Instagram, and WhatsApp.
Meta’s mission is to give people the power to build community and bring the world closer together.
Some key highlights of Meta Platforms include:
– Meta was founded by Mark Zuckerberg in 2004.
– The company is headquartered in Menlo Park, California.
– Meta has more than 3 billion monthly active users across its platforms.
In conclusion, Meta Platforms continues to play a significant role in shaping the way people communicate and interact in today’s digital age.
Analysts Expectations for Meta
Based on Bloomberg data, analysts expect Meta to continue its trend of resurgent earnings growth. The consensus estimate among brokers implies Meta‘s earnings will grow 95% to $4.29, with revenues projected to rise by more than 26%, primarily due to the platform’s app business.
Strong Performance Forecast
The strong performance is expected to come from an increase in average revenue per user, with solid, but historically modest, active user growth between three and four percent enhanced by generating higher advertising sales on a user-by-user basis. Much of this improvement is expected to come from the efficiencies delivered by artificial intelligence integration.
Meta’s Earnings
Meta’s earnings are also expected to be bolstered by a more disciplined approach to capital expenditure and cost management, with operating margins significantly higher than a year ago, albeit down from the previous quarter.
Analysts project resilient growth moving forward, although improvements in the top line and bottom line are forecast to moderate. The outlook for Meta will be determined by its ability to capitalise on AI technology and grow revenue per user while keeping capital expenditure under control.
Analysts project resilient growth moving forward, although improvements in the top line and bottom line are forecast to moderate. The outlook for Meta will be determined by its ability to capitalise on AI technology and grow revenue per user while keeping capital expenditure under control.
Analyst Ratings
– Overall, analysts are bullish on Meta’s stock. 62 brokers give it a buy rating, and seven give it a hold. Two, however, suggest selling the stock at current prices. The consensus price target is at a lofty premium of $545.29 per share.
Meta Platforms report after the closing bell on Wednesday, April 24, 2024.
Meta Platforms reported strong earnings in their latest financial report. The company’s revenue increased by 15% year-over-year, exceeding analyst expectations. The CFO stated, “We are pleased with the company’s performance this quarter.”
– Revenue increased by 15%
– Earnings exceeded expectations
– Positive outlook for the company’s performance
Microsoft (MSFT) is a multinational technology company known for its popular software products.
Some key products and services offered by Microsoft include:
– Windows Operating System
– Microsoft Office Suite
– Azure Cloud Services
In 2020, Microsoft reported a revenue of over $143 billion.
>”Empower every person and every organization on the planet to achieve more.”
Microsoft’s Fiscal Q3 Expectations
Microsoft’s fiscal Q3 is expected to reveal ongoing strong growth driven by artificial intelligence and the cloud services business. Bloomberg data (below) implies analysts expect adjusted EPS to rise 15% to $2.83 from a comparable rate of topline growth.
Cloud revenues are expected to drive earnings growth.
Intelligent cloud revenues are expected to top $26.25 billion – a growth rate of nearly 19% – with artificial intelligence integration, powered by Microsoft’s acquisition of open AI, driving the solid performance.
Revenue growth in Microsoft’s other business segments
especially personal computing, is forecast to be positive, although likely to continue to reveal consolidation.
Analyst Sentiment on Microsoft Shares
According to Bloomberg surveys, analysts remain very bullish on Microsoft shares. The stock boasts a consensus “buy” rating, with 92.5% of analysts making that recommendation and the remaining giving a “hold rating”. The consensus price target is a significant premium at $472.57.
Microsoft Q3 Earnings Announcement
Microsoft reports its Q3 earnings on Thursday, April 25, in post-market trade.
Technical analysis: US Tech 100
“The US Tech 100 index is currently showing strong bullish momentum, with the MACD indicator confirming the uptrend.”
“Investors should keep a close eye on key resistance levels at 15,000 and 15,200, as a break above these levels could signal further upside potential.”
“On the downside, support is seen at 14,500 and 14,300, where the index could find some buying interest.”
– Monitor the RSI for any overbought conditions, which could indicate a possible pullback in the short term.
– Overall, the outlook for the US Tech 100 remains positive, but caution is advised as markets can be volatile.
Tech stocks have pulled back going into earnings
with a mixture of weaker sentiment stemming from geopolitical risks and the pricing out of US rate cuts this year weakening valuations. The NASDAQ-which Capital.com’s clients can trade via the US Tech 100-has seen its primary uptrend breakdown as momentum turns to the downside. Having broken support (now potential resistance) at approximately 17,400, the index has bounced off technical support just below 17,000. If that level were to break, a confluence of support levels, including the 200-day moving average, exists around 16,250.
Source: Trading View
(Past performance is not a reliable indicator of future results)
Introduction
The following article discusses the impact of inflation on the economy.
“Inflation is defined as the rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is falling.”
Inflation can have significant effects on various aspects of the economy, such as consumption, investment, savings, and overall economic growth. It is important for policymakers to closely monitor inflation rates and take appropriate measures to control it.
– Higher inflation can lead to an increase in interest rates, affecting borrowing costs and slowing down economic activity.
– On the other hand, low inflation can hinder consumption as consumers may delay spending in anticipation of lower prices in the future.
Overall, inflation is a key economic indicator that plays a crucial role in shaping the economic landscape.
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