Earnings preview – Apple, Meta, Amazon

Big tech earnings continue this week with three more of the Magnificent seven in Amazon, Meta and Apple due to report Q4 earnings after the US close on Thursday.

So far, we’ve had mixed results from the first three Mag 7 tech stocks, none of them impressed stockholders much, with Tesla, Microsoft and Alphabet all down post earnings to varying degrees, will this new batch turn things around?

AMAZON

Amazon’s cost-cutting efforts look like they begin to pay off with analysts predicting a significant jump in earnings as compared to a year ago. Earnings are forecast at 80 cents per share for Q4 2023 versus 3 cents a year ago. Revenue is also expected to jump to $166 billion which is about $17 billion more than for the same period a year ago. Another good sign for the bulls is that Amazon has a good track record with earnings beating estimates every quarter of the last fiscal year.

META

Meta comes into today’s earnings after a stellar 2023 where the stock price increased by 194% on the back of the company cutting costs and seeing an increase in users and engagement. Investors and analysts are expecting big things in the latest earnings with consensus calling for earnings of $4.93 per share up from $1.76 a year ago, with revenues of just over $39 billion.

Two big parts of the business that will be of extra importance to investors and the reaction in stock price will be Meta’s AI efforts and their growth in China, which has become a growing source of revenue for the company.

APPLE

Apple along with Tesla has been one of the Magnificent 7 laggards with the stock price down around 4% YTD.  A lukewarm response from investors to their flagship Vision Pro and waning demand for iPhones from China weighing on the stock price. Despite this AAPL is expected to report notably stronger earnings than a year ago, with a consensus of $2.10 per share for Q4 2023 , an increase from $1.88 a year ago. Revenue is projected at $118 billion, a $1 billion increase from Q4 2022.

Investors will be focusing on the performance of Apple Services, plans for the Vision Pro and how sales are performing in China. If Apple can allay investors’ fears and provide guidance showing that the Chinese market is solid especially , some of the concerns that have seen the stock down so far this year could be eased.