Investors have a few days to brace for another onslaught of financial data coming next week after a three-day deluge of quarterly reports from half a dozen of the world’s major tech companies — Amazon AMZN +0.33%, Apple, Microsoft MSFT -0.97%, Alphabet, Intel, Meta, among other.
The batch from this week was received differently. Better-than-expected results were posted by Amazon, making it the huge winner. It’s a Win for Amazon. The Shares Blow Up. The last quarter saw a 7% increase in Amazon sales. On hearing the news, shares rose 11% and that led to a market rise on Friday that was particularly strong. Microsoft (ticker: MSFT) also had a well-received quarter, partly as a result of some optimistic predictions for the upcoming year.
As iPhone sales remained robust and component difficulties subsided, Apple’s quarter came in slightly ahead of expectations. A strong market for search advertising helped to improve Alphabet’s results. However, Meta offered a discouraging prognosis on lackluster ad sales, and Intel suffered as PC and data center chip sales declined.
Investors have been comforted by the fact that the current tech earnings season hasn’t been as dismal as anticipated. And every firm reporting the next week will be dealing with some variation of the same economic challenges: a strong currency, rising interest rates, Russia’s conflict with Ukraine, a sluggish PC and advertising market, and declining consumer demand.
What we observed this week was that investors are willing to purchase shares of companies that are deftly navigating those challenges (such as Amazon and Microsoft), but they will continue to sell when faced with the possibility of longer-term problems, as seen not only with Intel and Meta, but also with Roku, Coursera, and Teledoc, all of which suffered sharp declines last week on weak results and guidance.
The following are some highlights for the next week:
Results from Arista Networks (ANET) are expected to be remarkable when they are released on Monday. The firm is a significant supplier of networking equipment to the major cloud providers, and they all them continue to make significant investments in the construction of new data centers to support rapid development.
Google Cloud increased its revenue by 36%, Amazon Web Services increased its revenue by 33%, and Microsoft Azure’s revenue increased by 46% when currency fluctuations were taken into account. As it expands the metaverse, Meta is maintaining its ambitious capital investment program despite decreasing total expenditure expectations.
Cisco (CSCO) and Ciena (CIEN), whose quarters conclude in July, might be able to get some insight from Arista’s performance about the networking results to come.
While many of the major providers of cloud computing applications have July quarters and won’t report for another couple of weeks, Fastly (FAST) and Cloudflare (NET), two providers of content delivery networks, will provide updates the next week. Additionally, we’ll receive a variety of reports from the software industry, including those from Atlassian (TEAM), Dropbox (DBX), Datadog (DDOG), Fortinet (FTNT), and Twilio (TWLO).
Electronic Arts and Activision Blizzard
Activision Blizzard ATVI +0.16 percent (ATVI) reports on Monday, while EA (EA) reports on Tuesday. Activision’s attention is focused on the progress of the company’s imminent acquisition by Microsoft.
Walmart’s recent earnings warning and Shopify’s wave of layoffs hammered the retail sector. Keep a watch on the results of eBay (EBAY) on Wednesday and Wayfair (W) and BigCommerce (BIGC) on Thursday for new insights on the status of the e-commerce sector.
Food Delivery and Ridesharing Platforms
Results from the “sharing economy” players will also be released, including those from DoorDash (DASH) and Lyft (LYFT) on Thursday and Uber (UBER +4.90%) on Tuesday. All three equities have been harmed by ongoing post-pandemic problems, as well as by rising gasoline prices and a lack of drivers. These companies are in desperate need of, well, a boost: year to date, Uber is down 45%, DoorDash is down 54%, and Lyft is down 69%.
Given Intel’s disappointing results on Thursday, Advanced Micro Devices (AMD) will release its financial results on Tuesday, which will be highly scrutinized in the semiconductor industry. Both major suppliers of mobile phone radio chips, Qurvo (QRVO) and Skyworks (SWKS), will release earnings reports the following week. An industrial and automotive chip producer called ON Semiconductor (ON) released financial results on Monday.
Travel Booking Platforms
Next week, Expedia (EXPE), Booking (BKNG), and Airbnb (ABNB) are the three biggest online travel companies that will all release their quarterly financial results. During this week’s call, Alphabet mentioned that a strength in travel was a contributing factor to its good search results.
According to Philipp Schindler, chief business officer of Alphanet, “searches for destinations to travel in the summer were up two times internationally year over year, while queries for last-minute hotel discounts were up 50%.”
That is excellent news for a sector that has had conflicting outcomes following the epidemic.
When it reports on Thursday, Yelp (YELP) will provide some hints about the state of the local advertising industry.