Price Information and Economic Data
The price information and economic data in this article are sourced from Bloomberg.
– Bloomberg is a reputable source for financial information.
– Their data is widely used by investors and analysts worldwide.
Quarterly Earnings 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 is a leading electric vehicle company.”
– Founded in 2003
– Headquarters in Palo Alto, California
– CEO: Elon Musk
Tesla performance in Q1:
– 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.
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.
– Supply disruptions
– Snarled supply chains
– Weaker demand for Tesla’s cars
Tesla Layoffs
– Following the delivery data, 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 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 a multinational conglomerate that was founded in 2015 as part of a corporate restructuring of Google. It is the parent company of Google and several other businesses previously owned by Google.
Key points about Alphabet:
– Alphabet was created to provide more transparency and accountability for the various businesses under its umbrella.
– Google remains the largest and most well-known subsidiary of Alphabet, encompassing products such as Search, Android, Maps, and YouTube.
– Other businesses under Alphabet include Waymo (self-driving cars), Verily (life sciences), and X (moonshot projects).
– The company is known for its diverse interests and investments in various sectors, including technology, healthcare, and transportation.
In the words of Alphabet’s founders, Larry Page and Sergey Brin:
“Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead.”
Alphabet Growth Outlook
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.
– This growth is attributed to the company’s focus on innovation and expansion.
– The cloud services business has been a key driver of revenue growth.
– Analysts are optimistic about Alphabet’s prospects in the coming months.
Advertising Revenue
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.
– Advertising revenue
– Cloud services
– 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.
An important focus for investors is the company’s ability to balance revenue growth with controlling expenses.
– With the ongoing developments in AI and technology, Alphabet’s performance in this area will be closely monitored.
– The company’s success in achieving this delicate balance will likely have a significant impact on investor sentiment and the stock price.
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.
– Buy: 55 brokers
– Hold: 10 brokers
Alphabet reports after the closing bell on Tuesday, April 23, 2024.
– Alphabet is expected to announce its quarterly earnings.
– Investors are eager to see the financial results.
– Analysts are predicting strong numbers.
– “This could be a game-changer for the stock.”
Meta Platforms (META)
META Platforms, formerly known as Facebook, is a leading social media company.
– It was founded by Mark Zuckerberg in 2004.
– The company is headquartered in Menlo Park, California.
– META’s mission is to give people the power to build community and bring the world closer together.
> “Connecting billions of people globally and transforming the way we communicate.”
Analysts Expect Resurgent Earnings Growth
– 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 Expectations
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.
– Increase in average revenue per user
– Solid active user growth between three and four percent
– Higher advertising sales on a user-by-user basis
– Efficiencies delivered by artificial intelligence integration
Meta’s Earnings and Financial Management
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.
– Improved capital expenditure
– Better cost management
– Higher operating margins
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
– Resilient growth
– Top line
– Bottom line
– Forecast
– Moderate
– Outlook
– Meta
– AI technology
– Revenue per user
– Capital expenditure
Analysts’ Sentiment on Meta Stock
Overall, analysts are bullish on Meta’s stock.
– 62 brokers give it a buy rating,
– 7 give it a hold,
– 2 suggest selling the stock at current prices.
The consensus price target is at a lofty premium of $545.29 per share.
Meta Platforms Earnings Report
Meta Platforms reported earnings after the closing bell on Wednesday, April 24, 2024.
– The stock price increased by 5%.
– The revenue exceeded analysts’ expectations.
– User engagement surpassed previous quarters.
Microsoft is an American multinational technology company with a diversified portfolio that includes software, hardware, and services.
– Founded in 1975 by Bill Gates and Paul Allen
– Headquarters located in Redmond, Washington
– One of the largest technology companies in the world
“Empower every person and every organization on the planet to achieve more.”
Microsoft’s Q3 Performance Analysis
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 driving earnings 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 Business Segments
Revenue growth in Microsoft’s other business segments, especially personal computing, is forecast to be positive, although likely to continue to reveal consolidation.
– Revenue growth
– Other business segments
– Personal computing
Analysts’ Outlook 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.
– 92.5% analysts recommend a buy rating
– Remaining analysts suggest a hold rating
Microsoft Q3 Earnings Report
Microsoft reports its Q3 earnings on Thursday, April 25, in post-market trade.
– Just a friendly reminder to keep an eye on the report release!
Technical analysis: US Tech 100
The latest technical analysis on the US Tech 100 index shows that it is currently trading in a narrow range.
– The index has been consolidating between support at 13,500 and resistance at 14,000.
– Short-term indicators suggest a potential breakout approaching.
– Traders are advised to watch for a decisive move above 14,000 or below 13,500.
– A breakout above 14,000 could signal a bullish continuation, while a breakdown below 13,500 could indicate a bearish reversal.
Remember: “Always conduct your own research before making any trading decisions.”
Tech stocks pullback going into earnings
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.
– NASDAQ trend breakdown
– Weaker sentiment from geopolitical risks
– Pricing out of US rate cuts
– Tech stocks valuation weakening
Source: Trading View
Past performance is not a reliable indicator of future results
Overview
The price information and economic data in this article are sourced from Bloomberg.
– Bloomberg provides reliable and up-to-date financial information.
– Access to a wide range of data for analysis.
– Trusted by professionals in the financial industry.
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