Alphabet, Microsoft Lead Bear-Market Earnings Season
Investors are facing a make-or-break week for some of Wall Street's most influential tech stocks in a historic year for the group marked by a plunge into bear market territory.
The superlatives have followed one after another in 2022's wild ride. Shares of Meta Platforms Inc. have lost 61%, their biggest drop since the company went public a decade ago. Apple Inc., Alphabet Inc., Amazon.com Inc. and Microsoft Corp. are set for their steepest declines since the global financial crisis.
The Nasdaq 100 Index rose 0.6% on Tuesday.
Now, these companies are slated to report quarterly results this week with projections showing a profit decline by the most in at least three years. The quintet of stocks together comprise about 40% of the weight of the Nasdaq 100 Index, which has lost $6 trillion of value this year because of supersized interest rate hikes from the Federal Reserve and the growing potential of a recession.
“They are essential to the sentiment around tech, no doubt,” said Neil Campling, an analyst at Mirabaud Securities. “Investors are now focused on the bottom line and want evidence of lower costs, disciplined spending, and not chasing revenue growth at all costs.”
Here's a look at the Big Tech stocks slated to report this week and what investors are keeping an eye on.
Alphabet
Investors are concerned about the strength of the ad market in a weaker economy, a theme that was underlined by weak growth out of Snap Inc. last week. However, analysts are still penciling in full-year revenue growth for Alphabet of about 12%, slightly faster than the S&P 500, with double-digit increases also expected for the next three years.
Any sign after the market closes Tuesday that those forecasts are too optimistic could send the stock on
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