Editor’s Note: This article is regularly updated to bring you relevant, up-to-date information.
Earnings season is here, and the biggest technology companies in the world are slated to announce quarterly results the week of July 26. All eyes will be on the Nasdaq stock exchange as market-moving tech giants release their earnings reports and provide updated guidance on their 2021 outlook.
So far, the earnings picture looks exceptionally strong for companies that have reported their quarterly earnings this month. Goldman Sachs (NYSE:GS) far exceeded expectations and Coca-Cola (NYSE:KO) beat analysts predictions for revenue generated and earnings per share.
Data provider FactSet estimates the second quarter earnings growth rate for companies listed on the S&P 500 Index will be 64%. If accurate, “it will mark the highest year-over-year earnings growth rate reported by the index since Q4 2009,” according to the report.
With that in mind, here are seven influential technology companies reporting earnings in the week ahead:
- Tesla (NASDAQ:TSLA)
- Apple (NASDAQ:AAPL)
- Microsoft (NASDAQ:MSFT)
- Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG)
- Advanced Micro Devices (NASDAQ:AMD)
- Facebook (NASDAQ:FB)
- Amazon (NASDAQ:AMZN)
Earnings Reports: Tesla (TSLA)
First out of the gate next week is electric vehicle (EV) maker Tesla. Analysts will be watching for any signs of a slowdown in production or deliveries. They’ll also be monitoring the ongoing impact of the global semiconductor shortage on the company.
Shareholders are hoping an earnings beat will send TSLA stock higher. At $644, the share price is up 92% over the past 12 months but is down 10% year-to-date (YTD). The stock has been trading sideways since May.
For the first quarter, Tesla reported earnings per share (EPS) of 93 cents. That’s well above the consensus estimate of analysts, who forecast EPS of 75 cents. Tesla’s revenue rose 74% in the first quarter to $10.4 billion, a hair below the $10.48 billion forecast by Wall Street.
For the second quarter, the company is expected to report revenues of $11.22 billion and EPS of 96 cents. Anything over and above those numbers could give TSLA stock a much-needed lift.
On July 27, we’ll hear from iPhone maker Apple. Wall Street is expecting the company to report another strong quarter driven, in large part, by sales of its 5G-enabled iPhones.
Analysts forecast that Apple’s quarterly sales will total $72.8 billion for the company’s fiscal Q3, which would be 22% higher YOY. The company is expected to report EPS of 99 cents. That would be 53% higher than its EPS in the same quarter of 2020.
Apple, which has a track record of exceeding earnings targets, appears to be going all in on 5G smartphones. The company just announced that all the iPhones released in 2022 will be 5G enabled, including its first low-cost handset in two years.
Apple still derives half of its revenue from iPhone sales. The upgrade to ultrafast 5G wireless technology ushered in a “super cycle” for iPhone sales last year. If Apple can continue this trend, it could lead to a windfall for the company.
AAPL stock has been breaking out as of late. It rose nearly 11% in the past month to its current level of $147.70.
Earnings Reports: Microsoft (MSFT)
Microsoft, the only other company besides Apple that has a $2 trillion market capitalization, will also report earnings on July 27. As is always the case, analysts expect strong growth from the Seattle-based company.
Quarterly revenues are expected to be $44.07 billion, which would be nearly 16% higher than the same quarter last year. Earnings per share of $1.90 are also expected, which would represent YOY growth of 30%.
Analysts are calling for strong sales across the company’s diverse product lines, including its Xbox gaming console and Azure cloud computing service.
MSFT stock outperformed in the first half of this year, rising nearly 30% YTD compared to a 14% gain for the tech-laden Nasdaq stock exchange. The shares currently trade at nearly $288 apiece.
Analysts praise the company for finding new growth areas while keeping legacy product sales strong. For example, in recent years, Microsoft has developed its cloud computing business and Teams video conferencing platform. At the same time, it unveiled new versions of its stalwart Office software and Xbox gaming device.
Alphabet (GOOG, GOOGL)
Another tech behemoth reporting on July 27 is Alphabet, the parent company of Google. Investors will be hoping for some good news, as the company has been clobbered by several recent antitrust actions. The French government imposed a hefty fine for copyright issues and more than 30 U.S. states sued the company over its app store.
Fortunately for shareholders, the antitrust issues haven’t held back GOOGL stock. Its price is up nearly 50% year to date at $2,619 per share.
In terms of its earnings, analysts expect Alphabet to report revenues of $56.03 billion and EPS of $19.14. Antitrust problems aside, the company and its online search and advertising businesses have proven to be largely immune to the Covid-19 pandemic.
Online advertising is expected to roar back with the broader economy. It’s forecast to reach $646 billion globally between now and 2024. Beyond digital ads, Alphabet can also continue to grow from its forays into cloud computing and artificial intelligence.
Earnings Reports: Advanced Micro Devices (AMD)
It’s been a lackluster year for semiconductor company Advanced Micro Devices, more commonly known as AMD. Since the start of 2021, AMD stock is down 1.3%.
At $90 per share, the stock hasn’t really done much of anything over the past seven months. Shareholders who’ve stuck with the company will be hoping for a spark when AMD reports earnings on July 27. Wall Street will be watching for signs that the worldwide semiconductor shortage is beginning to ease.
AMD Chief Executive Officer Lisa Su has recently warned that the current shortage is likely to linger into 2022. The supply chain issues will continue impacting everything from automobiles to smartphone manufacturing.
But despite the chip shortage, AMD has reason for optimism. The company’s semiconductor sales have gotten a boost from their use in gaming consoles such as Microsoft’s Xbox Series X.
Analysts anticipate that AMD stock will take off once the company completes its $35 billion acquisition of Xilinx (NASDAQ:XLNX). The purchase will give it a leading position in the data center chip market.
For its second quarter earnings, Wall Street forecasts that AMD will report revenues of $3.62 billion, which would be 87% higher than the year-ago quarter. EPS is forecast to come in at 54 cents, which would be a 200% YOY increase.
Social media giant Facebook is riding high going into its July 28 earnings report. The company recently won a huge antitrust victory after a government case brought against it by the Federal Trade Commission (FTC) was dismissed.
News of its success was enough to push FB stock past the $1 trillion market capitalization level for the very first time. While the company continues to face other antitrust battles around the world, this recent win was seen as a big boost for the entire tech sector.
Outside the courtroom, Facebook’s online advertising business continues to see strong growth. In Q1 of this year, Facebook reported the average price per advertisement on its platform increased by 30% from a year earlier. The number of advertisements booked climbed 12% YOY.
Those strong ad numbers helped propel Facebook’s first quarter revenue up 47.6% from a year earlier to $26.2 billion. At $367 per share, FB stock is now up nearly 34% YTD.
For the second quarter, analysts are calling for Facebook to announce revenue of $27.82 billion and EPS of $3.02.
Earnings Reports: Amazon (AMZN)
Amazon’s first earnings report under new Chief Executive Officer Andy Jassy will be released on July 29. Industry observers will be watching for signs of where the new leader plans to take the company.
It will also be interesting to see if Amazon can report yet another quarter of revenues that exceed $100 billion. On the other hand, the e-commerce colossus may have experienced a slowdown in online shopping as consumers return to malls and outlet stores.
For this year’s second quarter, analysts expect Amazon to report revenues of $115 billion and EPS of $12.22. However, the company could easily surpass those expectations; its annual Prime Day sales event took place in June and will be included with its second-quarter numbers.
Amazon is continuing to grow its Amazon Web Services cloud computing offering (which Andy Jassy previously led.) It is also achieving good results with its streaming service and Whole Foods grocery stores. Next up is the eagerly-awaited approval of the company’s $8.5 billion acquisition of Metro-Goldwyn-Mayer Studios.
AMZN stock has risen nearly 12% so far in 2021, putting it on par with the gains of the Nasdaq composite exchange. Amazon shares currently change hands for about $3,650 each.
On the date of publication, Joel Baglole held long positions in AAPL and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.