Earnings season continues to roll on, and the stock market continues to roll higher. Many folks think Donald Trump’s just-released tax plan will be a boon to business too.
Of course, that doesn’t matter for companies about to report earnings for the previous three months; their results already are what they are. But it could perhaps affect sentiment — how investors react to the numbers.
The tech sector has been especially strong this year, too, with the Nasdaq gaining double-digits — almost twice as much as the broader S&P 500.
With that in mind, here are three tech earnings reports to keep on your radar next week: smartphone behemoth Apple Inc. (NASDAQ:AAPL), chipmaker Advanced Micro Devices, Inc. (NASDAQ:AMD) and cybersecurity company FireEye Inc (NASDAQ:FEYE).
Earnings Reports to Watch: AMD (AMD)
Advanced Micro Devices has gained 18% so far this year and a mind-boggling 236% over the past 12 months. The company, though, isn’t even profitable, while its debt currently outweighs its assets. AMD is expected to be profitable for the full-year and grow that profit by 80% nearly fourfold next year, but it’s sitting in the red for this quarter and next.
In terms of recent quarterly earnings reports, AMD has beat or met Wall Street’s expectations in each of the past four quarters. And it has decent revenue growth on tap: 18% for the soon-to-be reported quarter and 10% for upcoming annual periods. AMD’s recent acquisition of virtual reality chipmaker Nitero could help fuel that revenue growth even more.
Indeed, immersive platforms are the biggest opportunity for the company according to its last full-year report, and the industry indeed continues to generate buzz, especially in the wake of Facebook’s F8 conference, which focused pretty heavily on VR and AR.
Still, competition is high. Nvidia is the leader in the market and Apple continues to bring more chip-making in-house. Keep an eye for any progress on stealing market share from Nvidia in the upcoming report, as that’s key to a continued run for AMD stock.
Earnings Reports to Watch: Apple (AAPL)
Speaking of Apple, the company is also reporting earnings soon. Thus far, Apple stock has gained 25% year-to-date and 36% over the last year. In fact, AAPL has largely been carrying the S&P 500’s gains.
In terms of the upcoming report, Wall Street is expecting $2.02 per share from the tech giant, just 6% growth, on the back of 5% revenue gains. For the next five years, though, earnings growth should be just shy of double digits, which isn’t too shabby considering Apple is now a veteran tech company with an established market and moat.
Wall Street’s bar for the current quarter and next quarter have been lowered in recent months, but the expectations for this full year and next have been moving up — a good sign.
Slim earnings beats in each of the last three quarters reminds us that Apple knows how to play the earnings game. I expect another beat and another leg higher for the stock.
Earnings Reports to Watch: FireEye (FEYE)
Cybersecurity might be a hot sector, but FireEye has had a rocky road of late, losing 30% of its value over the past 12 months, despite a 5% gain on the books in 2017 alone.
The company is supposed to lose 26 cents per share this quarter — a smaller loss than a year ago, but two pennies worse than Wall Street thought the loss would be as of three months ago.
Revenue is supposed to contract as well. And while four quarters of earnings beats may sound nice, all the numbers were in the red. That’s hardly anything to write home about.
For the rotten cherry on top, FEYE stock is trading for three times its sales and book value despite the recent damage to the stock. I don’t expect this earnings report to show anything that will change investors’ minds about FireEye’s current appeal.
Hilary Kramer is the editor of GameChangers, Breakout Stocks, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.
