Big Tech Companies' Earnings Reports Are Coming Up

Major Tech Companies' Earnings Reports Await Investors

Google (GOOG, GOOGL), Meta (META), and Microsoft (MSFT) are preparing to announce their results on Wednesday evening, while Amazon (AMZN) and Apple (AAPL) will also share their performances on Thursday. This process is shaped by a series of significant announcements that could influence market direction.

Market observers are questioning the returns on Amazon, Google, Meta, and Microsoft's investments in artificial intelligence and their determination to expand data centers. Meanwhile, a key question for Apple will be how the newly released iPhone 17 series performs compared to the iPhone 16. The company's market value is approaching $4 trillion, and a successful outcome could help it surpass this threshold.

These reports, which have the potential to be one of the biggest tests for the technology sector this year, will also be a critical week for investors and analysts. Karl Keirstead from UBS Global Research notes that conversations with Amazon, Google, and Microsoft’s cloud customers have been more positive this quarter compared to previous reports.

According to market data, Amazon's stock price has only increased by 0.03% since the beginning of the year, lagging behind Google and Microsoft, which are expected to grow by 33.2% and 24.2%, respectively. Keirstead points out Amazon’s dependence on AI for data center demand and states that investors need to have more confidence regarding AWS's sensitivity to AI workload to boost growth sentiment.

Amazon also recovered following a major AWS outage last week, and its stock value rose by more than 2% on the day of the outage. The strong Project Rainier aims to connect hundreds of thousands of Trainium2 chips for AWS across the United States.

Google Cloud Platform is another key area to watch this quarter. Google's CEO Sundar Pichai stated that cloud revenue is growing at an annual pace of $50 billion, with increasing demand for its AI portfolio. Justin Post from BofA Global Research expresses optimism about an increase in ad revenues due to the shift toward generative AI.

On the other hand, Microsoft’s cloud business surge is linked to the demand generated by OpenAI. However, Microsoft's decision to provide additional cloud capacity to OpenAI raises some concerns. Meta does not sell cloud or AI services but uses AI in its advertising business, reflecting the returns on its multimillion-dollar investments.

Finally, Apple has not yet delved into AI, but reports indicate that the iPhone 17 has sold 14% more than the iPhone 16 in its first days. However, analysts note that market momentum has cooled in some regions. Additionally, investors will closely watch the demand for the new iPhone Air model and the performance of the iPhone Plus in replacing it.