American tech stock earnings preview: FB, AAPL, AMZN, MSFT and GOOG

As my colleague Fiona Cincotta pointed out late last year, US tech stocks (Facebook, Apple, Amazon, Microsoft, and Google) now account for a full quarter of the S&P 500’s market capitalization. These firms have been some of the biggest winners of global lockdown and fast-track measures. implementation of digital commerce over the past year, but now the question is, “If the US and other developed countries return to ‘normalcy’ in the coming months, will the US tech giants return last year’s gains?”

WFH permanent?

Until we pretty So far, the biggest unknown in this quarter’s tech revenue reports will be how much the pandemic-driven shifts in consumer preferences will ultimately prove to be permanent. A number of well-known companies have indicated that they expect employees to return to traditional jobs rather than continuing to work from home, although many (including even weary old automakers like Ford) have suggested that some employees will continue to work from home throughout the year. at least part of their working weeks. In this month’s reports, traders will closely monitor how tech executives are characterizing this trend and will issue recommendations for the implementation of their technology-driven products in the coming quarters.

Are regulatory risks on the rise?

Another key question after the November Blue Wave elections concerns the extent to which President Biden and the democratically controlled Congress will seek to regulate these monsters. So far, regulators have continued to pursue antitrust measures against Apple and Google, but we have yet to see the landmark new case filed, which many analysts expect in the coming years.

Separately, it is worth noting that President Biden’s proposed tax hike (if ultimately adopted in a form similar to the original proposal) could be particularly damaging to tech companies that have learned to minimize taxes through foreign organizations in recent years.

With these general themes in mind, we’ll take a quick look at each of the five FAAMG stocks below:

Alphabet Profit Technical Analysis (GOOG)

Report Date: April 27

Expectations: $ 15.41 per share, $ 41.8 billion earnings

Alphabet, best known as the parent company of Google, has posted the second-best performance in the group’s stock over the past year, gaining more than 80% in a consistent uptrend. Technically, there is little indication that the trend is likely to end anytime soon, although the overbought RSI and potential RSI divergence could hint of a short-term pullback or pause if profits fail to reach their highs. expectations:

Source: StoneX, TradingView

Microsoft Profit Technical Analysis (MSFT)

Report Date: April 27

Expectations: $ 1.86 per share in earnings of $ 40.9 billion

Microsoft has been relatively lagging behind these big firms, climbing “just under” 50% over the past year. The company’s Teams video chat platform, as well as its cloud product Azure, have become synonymous with the global WFH movement, so any ideas on that front will be relevant. Technically speaking, the stock has broken out of the $ 200 low to mid-range sideways range over the past two weeks and hit new all-time highs, so the path of least resistance remains up as long as prices can hold above the previous one. – resistance turned into support around $ 245:

Source: StoneX, TradingView

Apple Profit Technical Analysis (AAPL)

Report Date: April 28

Expectations: $ 0.99 per share for $ 76.1 billion earnings

Apple has performed well in this group, growing more than 85% over the past year thanks to strong demand for its consumer electronics and related services, although, as shown in the chart below, this momentum has slowed lately. The stock is currently trading near the mid-year range, with the short-term momentum shifting in favor of the bulls so far in April.

This pattern makes the target levels relatively clear: a strong earnings report and upbeat outlook could be the catalyst for the AAPL to move to a record high of around $ 145, while a profit miss or a soft outlook for the rest of the year could bring prices back to normal. from the beginning of the year to the present, at least in the $ 120 zone:

Source: StoneX, TradingView

Facebook Profit Technical Analysis (FB)

Report Date: April 28

Expectations: $ 2.38 per share for $ 22.5 billion earnings

Stocks in the planet’s largest social media platform performed well after consolidating modestly in Q4 2020 and Q1 this year. As shown in the chart below, prices have recently broken past a previous all-time high of around $ 300, potentially paving the way for more mid-year strength if the upcoming P&L exceeds expectations. A break below $ 300 will bring the technical outlook back to the neutral one they spent most of last year on.

Source: StoneX, TradingView

Amazon Profit Technical Analysis (AMZN)

Report Date: April 29

Expectations: $ 9.98 per share per earnings of $ 104.6 billion

Despite (or perhaps because of) its sheer scale, Amazon is lagging behind these five technology leaders, having grown “only” by about 40% over the past year. The company has struggled to ramp up its production capacity, schedule a new CEO, and address labor issues during this period, so it’s no surprise that the stock is still in the same $ 3,000 to $ 3,500 range that has contained prices since last July. … While the company’s bulk retailing is the most visible leverage in the public eye, the profits of the fast-growing Amazon Web Services (AWS) division will be the most important aspect for traders. A break after gains above $ 3,500 could pave the way for continued gains, while a miss could keep the stock afloat for another couple of months.

Source: StoneX, TradingView

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