The next set of quarterly earnings from mega cap technology companies including key members of the so-called ‘Magnificent Seven’ could have a major influence on the direction of markets heading into the final months of 2023.

Investors will be hoping these tech titans have maintained their positive growth momentum and can pick up the slack from other sectors where earnings are under pressure.

First out of the gate on 24 October are Microsoft (MSFT:NASDAQ) and Alphabet (GOOG:NASDAQ), whose results will be scrutinised to see if the billions of dollars they are funnelling into AI projects are paying off.

Satya Nadella-steered Microsoft’s shares are up 40% year-to-date on excitement surrounding its growth potential in AI and analysts are looking for first quarter earnings per share of $2.65 on $54.5 billion of revenue. Sales rose 8% to $56.2 billion for the fourth quarter and earnings topped forecasts thanks to growth in Microsoft’s cloud business.

Alphabet’s share price is up 56% in 2023 so far and its second quarter earnings in July topped market expectations. Momentum in Google Cloud and Google Search is expected to have continued in the third quarter. Alphabet’s YouTube advertising revenues will also be pored over by analysts. Bloomberg forecasts point to 36% year-on-year EPS growth to $1.44 for Alphabet as a whole.

Excitement could also centre around updates on Bard, Alphabet’s chatbot tool supported by generative AI which is a rival to Microsoft’s ChatGPT.

In July, Alphabet chief executive Sundar Pichai insisted the company’s continued leadership in AI and ‘excellence’ in engineering and innovation are driving the next evolution of its search engine and improving all its services.

‘With fifteen products that each serve half a billion people, and six that serve over two billion each, we have so many opportunities to deliver on our mission,’ said Pichai.

Shares in social media giant Meta Platforms (META:NASDAQ) are up 160% year-to-date. Investors appear to be optimistic ahead of third quarter earnings on 25 October, with consensus calling for EPS of $3.59 on revenues of $33.4 billion.

On 26 July, Meta – which owns Instagram, Threads and WhatsApp – put up forecast-trumping second quarter earnings per share of $2.98 on $32 billion sales and predicted third quarter revenues of $32 billion to $34.5 billion, with confidence in its digital advertising business restored and sales growth back in high gear.

Third quarter numbers from Amazon (AMZN:NASDAQ) are hotly anticipated too, with the market eager to learn if the e-commerce-to-cloud computing group can beat earnings estimates yet again, with consensus calling for EPS of $0.58, up from $0.20 last year. iPhone designer Apple (AAPL:NASDAQ) is the final mega tech stock to report, with numbers scheduled for 2 November.

‹ Previous2023-10-19Next ›