Wall Street's Q1 earnings season will accelerate in the coming days, with investors bracing for one of the best reporting seasons in years. This amid the diminishing impact of the COVID-19 health crisis on various industries.
With trade nearing its all-time high, most of the attention will once again turn to the five major megacap technology companies, all of which will report their respective results in the coming week.
All five will enjoy another quarter of the blockbuster revenue and are worth considering given their growing dominance in the tech space.
1. Microsoft
Return Date: Tuesday, April 27
Estimated earnings per share: + 27.1% on an annual basis
Estimated Sales Growth: + 17% YoY
Performance year-to-date: + 16.1%
Market Cap: $ 1.93 Trillion
Microsoft (NASDAQ 🙂 has outperformed most software growth stocks of late, with shares of the Redmond, Washington-based tech titan recently hitting a new record thanks to robust demand for its cloud-based offering. The company has seen its stock rise about 16% since the start of the year, better than the 10% rise in the same time frame.
MSFT shares, which hit a record $ 261.47 on April 19, closed at $ 258.26 on Tuesday. With a market capitalization of $ 1.93 trillion, Microsoft is the second most valuable company listed on the US stock exchange.
Microsoft, which crushed last quarter expectations and revenue, is expected to report the following financial results on Tuesday, April 27, after the close of bubble.
According to consensus estimates, the technology giant should post earnings per share (EPS) of $ 1.78 for its fiscal third quarter, an improvement of 27% from earnings per share of $ 1.40 in the same period a year ago . Sales are expected to hit a record high of $ 41 billion, up 17% from sales of $ 35 billion in the same period a year earlier, amid strong demand for its cloud computing products.
As such, investors will focus on growth in Microsoft's thriving Intelligent Cloud business, including Azure, GitHub, SQL Server, Windows Server, and other business services such as Office 365. Microsoft's commercial cloud revenues increased by 34 % on an annual basis. year to $ 16.7 billion in the most recent quarter, while revenues from Azure cloud infrastructure services are up 50% over the period.
Despite high valuations – the technology giant's stock trades 38 consecutive times with 12-month gains – Microsoft still seems like a good bet in the future, given the rising demand for its cloud-based offering, making it one of the true leaders in its field.
2. Google
Date of earnings: Tuesday, April 27
Estimated earnings per share: + 58.1% on an annual basis
Estimated Sales Growth: + 24.3% YoY
Performance year-to-date: + 30.1%
Market Value: $ 1.54 Trillion
Google parent Alphabet (NASDAQ 🙂 is the best performing & # 39; FAAMG & # 39; stock of 2021 so far – by a wide margin – as its core search and ad revenues grow again after a short delay amid the coronavirus pandemic.
GOOGL shares, which are up nearly 30% since last year, closed at $ 2,279.01 yesterday, ahead of the recent high of $ 2,304.09 reached on April 19.
The Mountain View, California-based internet giant has a market cap of $ 1.54 trillion, making it the fourth most valuable company to trade on the US stock exchange.
Google, which crushed fourth-quarter and revenue expectations in early February, then reports financial results after the US market closed on Tuesday, April 27.
The consensus calls for first-quarter earnings of $ 15.60 a share, a 58% improvement from earnings per share of $ 9.87 in the same period a year ago. Sales are expected to come in at $ 51.2 billion, up about 24% from sales of $ 41.2 billion in the same quarter a year earlier.
Investors will continue to focus on growth rates of Google & # 39; s core web search and ad revenue businesses, which delivered year-over-year profit of nearly 22% to $ 46.2 billion in the previous quarter see. YouTube's ad revenue growth, which is up 46% in the quarter to $ 6.88 billion, will also be monitored.
In addition, one segment to be geared up for another quarter of blockbuster growth is Alphabet's Google Cloud Platform, which saw its fourth-quarter revenue increase by 47% to $ 3.83 billion. The company has invested heavily in its cloud operations – which are not yet profitable – as it catches up with Amazon and Microsoft.
Google currently has a market share of less than 10% in the cloud industry of $ 130 billion, compared to 20% from Microsoft and 33% from Amazon.
Investors will also like to hear new details about the US Justice Department's ongoing antitrust case against Google. Part of the suit focuses on allegations that the tech giant is monopolizing its internet search function to stifle competition.
3. Facebook
Date of earnings: Wednesday, April 28
Estimated earnings per share: + 36.8% on an annual basis
Estimated Sales Growth: + 33.1% YoY
Performance year-to-date: + 10.8%
Market Cap: $ 864.6 Million
Despite several headwinds – such as on-going regulatory investigations, ongoing privacy concerns and impending changes to Apple's iOS 14 that could negatively impact advertising activities – Facebook (NASDAQ 🙂 stocks have been on the rise of late. . almost 11% this year.
The social media giant, which has benefited from accelerated ad spend, now has approximately 3.3 billion monthly users in its family of apps, including Instagram, Messenger and WhatsApp.
FB shares settled at $ 302.65 last night, not far from their all-time high of $ 315.88 touched on April 8. At its current level, the Menlo Park, California-based company is valued at $ 864.6 billion, making it cap technology companies and the only one with a market cap of less than $ 1 trillion.
Facebook, whose fourth-quarter revenue easily exceeds expectations, is expected to report its first-quarter results on Wednesday, April 28, after the US market has closed.
The consensus calls for earnings per share of $ 2.34 for the period, an increase of nearly 37% from earnings per share of $ 1.71 in the same quarter a year earlier. Revenues are expected to grow 33% year-over-year to $ 23.6 billion, again driven by strong advertiser demand.
As such, Facebook's ad revenue – which grew 31% year-on-year in the fourth quarter despite an ongoing global boycott of more than 1,000 advertisers – will be closely watched by investors.
In addition, the market will pay attention to Facebook's update regarding its active user accounts and average revenue per user (ARPU) – two important metrics for the social networking company.
Facebook said Daily Active Users (DAUs) were up 11% from the fourth quarter year-on-year to 1.84 billion, while Monthly Active Users (MAUs) increased by 12% to 2.8 billion.
Meanwhile, the ARPU clocked in at a double-digit percentage gain, up 19% from the same period a year ago to hit a record high of $ 10.14. More impressively, the ARPU for Facebook's lucrative US and Canada region rose to $ 54 in the fourth quarter, up 32% from its $ 41 ARPU in the same period last year.
4. Apple
Date of earnings: Wednesday, April 28
Estimated earnings per share: + 53.8% on an annual basis
Estimated Sales Growth: + 31.6% YoY
Year-to-date performance: + 0.3%
Market Value: $ 2.24 Trillion
Apple (NASDAQ 🙂 was the biggest laggard among the 'Big Five' mega cap firms, with stocks up less than 1% since the beginning of 2021 and about nine percentage points behind the S&P 500.
The technology and consumer electronics conglomerate also significantly underperformed the NASDAQ Composite, which is up nearly 7% to date.
Following the hugely successful launch of the iPhone 12 with 5G functionality last year, some market experts have cited the absence of emerging new products as the main reason for Apple's relatively mild performance this year.
AAPL stock closed at $ 133.11 on Tuesday, about 8% below its all-time high of $ 145.09 reached on January 25th. The Cupertino, California-based iPhone giant has a market cap of $ 2.24 trillion, making it its most valuable company. trading on the American stock exchange.
Apple – which published the best report in its history in the previous quarter – then reports financial results after the market closed on Wednesday, April 28.
Consensus calls for earnings per share of $ 0.98 for the fiscal second quarter, up nearly 54% from the same period a year ago, but down sharply from earnings per share of $ 1.68 in the fiscal first quarter. Sales are expected to increase more than 31% from the same period a year earlier to $ 76.7 billion. However, that would mean a sharp drop in revenue of $ 111.4 billion in the last quarter.
In addition to revenues and revenues, Wall Street will focus on growing Apple & # 39; s subscription services business, including iTunes Music, Apple TV +, Apple Arcade, Apple Fitness + and the News + platform.
Any updates on the growth of the iPad and iMac business, as well as the wearables segment – including AirPods and the Apple Watch – will also be in the spotlight.
In addition, investors hope that Apple will provide more details about the possible impact of proposed tax rate changes and possible new legislation from the Biden government that seeks to curb the influence of Big Tech companies.
5. Amazon
Date of earnings: Thursday, April 29
Estimated earnings per share: + 89.4% on an annual basis
Estimated Sales Growth: + 38.4% YoY
Year-to-date performance : + 2.4%
Market Cap: $ 1.66 Trillion
Amazon (NASDAQ 🙂 was the other relative laggard among corporate technology leaders, gaining about 2% since the beginning of the year. Like Apple, Amazon stock has so far underperformed dramatically against both the S&P 500 and NASDAQ in 2021.
Widely regarded as one of the biggest beneficiaries of the COVID-19 health crisis, Amazon stocks have struggled this year as pandemic-era lockdown restrictions are diminishing and consumers are returning to brick-and-mortar stores in greater numbers.
AMZN shares, down 6% from their record high of $ 3,552.25 reached in September, ended at $ 3,334.69 yesterday. With a valuation of $ 1.66 trillion, the Seattle, Washington-based e-commerce and cloud giant is the third most valuable company listed on the US stock exchange.
Amazon – which reported a massive defeat and sales in the last quarter, is expected to report its first quarter financial results on Thursday, April 29 after the closing clock.
The consensus calls for earnings per share of $ 9.49, which would indicate year-over-year growth of nearly 90% from earnings per share of $ 5.01 in Q1 2020. Meanwhile sales are expected to increase about 38% from the year. ago to $ 104.4 billion, reflecting the continued strength in both ecommerce and cloud computing.
Investors will focus on the company's thriving cloud business to see if it can maintain its scorching growth rate. Amazon Web Services (AWS) revenues were up 28% to a record $ 12.7 billion in the fourth quarter.
Beyond the major retail and cloud units, advertising revenues will also be addressed, which have increasingly become another growth engine for Amazon. The numbers from this segment increased by 64% in the past quarter.
Despite concerns about impending antitrust reform amid allegations that the technology giant is monopolizing its services to stifle competition, Amazon remains one of the top names in the coming months due to its clear position as a leading name in both e-commerce and cloud.
