Tech earnings get set to take center stage
A busy week of earnings are ahead, with several of the top companies in the Nasdaq on tap to report third quarter results.
Third quarter earnings have been pretty solid so far, especially for the big banks. Now it’s time for some of the members of the FAANG club (or the Magnificent Seven if you want to add Microsoft) to show investors how they’re doing.
Netflix got the tech earnings parade off to a solid start this week, reporting big subscriber gains…and another price hike. Netflix’s stock surged 16% on the news. Next up? Microsoft and Google owner Alphabet report on Tuesday afternoon. Facebook parent Meta releases results on Wednesday following the close and then Amazon wraps up the big tech earnings week on Thursday after the bell. (Apple earnings aren’t until the week after next…on November 2.)
The tech-laden Nasdaq has fallen about 7% in the past three months, more than the Dow and S&P 500 during the same time frame. But the Nasdaq is still up 25% year-to-date, easily outperforming the other indexes. So it seems safe to say that investors are still betting on solid growth for the quarter…and hoping for bullish outlooks for the holidays/fourth quarter as well as for 2024.
How much will inflation eat into profits though? That remains to be seen. It’s also not clear if concerns about the US-China tech rift that has hurt Nvidia will be a problem for companies that do big business in China. Could there be a retaliation by Beijing? Will Chinese consumers pull back on buying US tech gadgets and services? Nvidia rival Intel also reports earnings next week.
Investors will keep a close eye on what companies have to say about the global landscape. They’ll also continue to warily watch the bond market. With the US 10-year yield flirting with 5%, a level it hasn’t hit since mid-2007, further spikes in Treasury yields have the potential to push the stock market, and especially high growth stocks, lower. The Fed’s November 1 meeting looms large too.
The megatechs aren’t the only companies that will be in the earnings spotlight next week either. Also on tap? Visa, Coca-Cola, Verizon, GE, T-Mobile, Boeing, IBM, Shell, Mastercard, Merck, Comcast, UPS, Exxon Mobil and Chevron. Whew! Rest up this weekend.