Week ahead: FAAMG+T earnings loom and why it matters

Market Updates

With a huge week of US tech earnings approaching, here’s what you need to pay attention to.

With the FAAMG+T companies all releasing new quarterly results this week, below we examine some of the key things traders and investors should look out for.

(F)acebook Q1 Earnings (Wednesday)
Despite casual onlookers often declaring the death of Facebook — in recent quarters the company has continued to solidly grow engagement, revenue and profits. Investors will likely be keen to see this trend continue when the company reports its Q1 earnings this Wednesday, with analysts forecasting quarterly earnings (EPS) of $2.36, according to Yahoo Finance.

Ultimately, the stock trades at a discount to its FAAMG+T peers, likely a consequence of regulatory overhang.

(A)mazon Q1 Earnings (Thursday)The pandemic was a boon for Amazon, with its e-commerce revenue hitting record highs in response. And despite the accelerated rollout of a Covid vaccine across many parts of the globe, expectations for Amazon remain high, with analysts forecasting first quarter revenues of $104 billion, according to Yahoo Finance.

Elsewhere, while unlikely to have an operational impact, this will also be the first quarter without founder Jeff Bezos in the role of CEO. It will be interesting to see if the tone or structure of the earnings release changes in response.

(A)pple Q2 Earnings (Wednesday)The market will likely be looking for any commentary around the impact of the global chip shortage, following recent reports of MacBook and iPad production delays. Beyond that, the performance of Apple’s services segment will also likely be a key area of interest, given its importance as a growth driver for the tech behemoth. Services revenue hit an all-time high in Q1.

(M)icrosoft Q3 Earnings (Tuesday)Despite the mixed success of Microsoft’s aggressive acquisition strategy, investors will probably be most concerned with the company’s cloud performance as part of its upcoming Q3. Microsoft’s intelligent cloud division continues to notch up high double-digit growth, hitting $14.6 billion in the second quarter, implying a growth rate of 23%.

The performance of this segment may very well impact how traders and investors respond to the upcoming quarterly, given the rapid expansion of Microsoft’s earnings multiple over the last 24 months.

(G)oogle Q1 Earnings (Tuesday)Following an excellent fourth quarter, investors will be keen to see growth from the search giant continue. Analysts remain bullish on Google overall, expecting Q1 total revenue of $51.55 billion and earnings (EPS) of $15.7, according to Yahoo Finance.

(+T)esla Q1 Earnings (Monday)With the electric automaker pre-reporting impressive Q1 delivery and production numbers, investors will likely be keen to see how that translates into revenue and earnings. Interestingly, despite being earnings positive in CY20, on an ex-regulatory credits basis, the automaker actually was loss making in the past financial year.

Analysts are estimating Tesla to deliver Q1 revenue of $10.29 billion against earnings (EPS) of $0.79, according to Yahoo Finance.

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