The S&P 500 index wrapped up the previous week on a somber note, witnessing a decline of more than 2.7% over the course of the last five trading sessions. This downward trajectory followed Federal Reserve Chair Jerome Powell’s recent remarks regarding the central bank’s ongoing struggle with inflation, which rattled investor sentiment on Friday.
As significant as the past week was for the stock market, the upcoming one looms even larger on the horizon.
Notably, it promises to deliver a wealth of crucial data, including the eagerly awaited Q3 GDP figures. But most importantly, investors eagerly anticipate earnings reports from tech giants, including Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN).
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Earnings reports tend to exert immediate influence on stock performance, making it imperative to delve into expectations for these reports and assess their potential impact on these three corporate behemoths.
Microsoft (NASDAQ: MSFT)
Microsoft, the second-biggest company in the world by market cap, is set to post its quarterly earnings on Tuesday, October 24, following the market close.
With an impressive stock market performance in 2023, and after closing the blockbuster acquisition of Activision-Blizzard, analysts have big expectations for Microsoft’s upcoming report.
According to consensus estimates, the tech giant is expected to report earnings per share (EPS) of $2.65 on revenue of $54.54 billion in revenue.
The company surpassed earnings projections in four previous quarters. Extending that streak on Tuesday would likely further boost MSFT’s year-to-date gains, which currently stand at over 36%.
Alphabet (NASDAQ: GOOGL)
Google owner Alphabet is scheduled to unveil its Q3 report on the same day as Microsoft, and just like with Windows maker, analysts are largely optimistic.
Notably, Wall Street expects the tech titan to post diluted EPS of $1.45 and revenue of $75.99 billion. For comparison, Alphabet reported diluted EPS of $1.06 on revenues of $69.09 billion in the year-ago quarter.
Additionally, the technology behemoth exceeded consensus EPS estimates in four of the past eight periods.
Alphabet is one of the US firms that thrived on the unprecedented artificial intelligence (AI) frenzy this year, with the company rolling out its own generative AI tool, Google Bard, earlier in the year.
GOOGL has advanced more than 52% since the beginning of the year and could easily expand this momentum if Tuesday’s report surpasses analysts’ estimates.
Amazon (NASDAQ: AMZN)
Out of the three, e-commerce and cloud computing giant Amazon witnessed the most remarkable stock market rally in 2023.
In Q2, Amazon reported better-than-expected EPS and revenue, triggering a positive investor reaction. Now, analysts and investors are bracing for the third-quarter report, which is scheduled to be released on October 26 after the market close.
Analysts forecasted Amazon to report EPS of $0.58, which would be a lower reading quarter-over-quarter but significantly higher compared to the same period last year.
Revenue is estimated to rise to $145 billion in Q3, surpassing the top end of Amazon’s own guidance for the period. Additionally, Amazon is also anticipated to post improved gross profit margins, although they could decline on a sequential basis from 48.3% to 47.3%.
Thanks to its strong footprint in the AI market and incredibly efficient Amazon Web Services (AWS), the AMZN stock soared over 45% in 2023, outperforming the S&P 500’s gains of 10.4%.
In addition to Microsoft, Alphabet, and Amazon, Facebook owner Meta Platforms (NASDAQ: META) is also set to report its Q3 results this week, with Wall Street anticipating strong year-over-year increases for both EPS and revenue.
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