Tech Titans Get Slaughtered: Will Meta, Apple, Amazon Earnings Revive The Sector?

Zinger Key Points
  • Meta releases its earnings after the market closes on Wednesday, with Amazon and Apple Inc. following on Thursday.
  • The tech-heavy Nasdaq is attempting to recover after dismal earnings reports issued by Google, and Microsoft.

The tech-heavy Nasdaq index is attempting to recover after dropping on Wednesday as losses in megacap tech companies spurred concerns over sluggish economic growth stemming from Alphabet Inc.'s GOOG and Microsoft Corp.'s MSFT dismal earnings and warnings.

Microsoft reported first-quarter revenue of $50.1 billion, up 11% year-over-year. The total beat an estimate of $49.8 billion from analysts, according to data from Benzinga Pro.

The company also reported earnings of $2.35, which beat estimates of $2.32 from analysts.

See Also: 11 Alphabet Analysts On Q3 Earnings Miss

While that may look positive on the surface, Microsoft issued weak guidance and cloud revenue that missed expectations. Here's a closer look:

  • Sales growth is also the lowest it has been in five years.
  • Microsoft’s Intelligent Cloud business segment generated $20.33 billion in quarterly revenue
  • That's slightly less than the $20.36 billion consensus estimates.
  • Microsoft expects $52.35 billion in revenue for the fiscal second quarter
  • That implies 2% growth at the middle of the range.

Google parent Alphabet also missed estimates on both the top and bottom lines.

According to Bloomberg data:

  • YouTube ad revenue was $7.07 billion
  • That's down 2% and misses analyst estimates of $7.42 billion
  • Alphabet reported dismal earnings per share (most recently $1.06) for three consecutive quarters, the longest such skid in seven years.
  • Alphabet had only missed an estimate once since the end of 2017 prior to this year
  • The company had outperformed expectations nine consecutive quarters.

Meta Platforms Inc. META, parent company of Facebook, and Inc. AMZN, both of which report earnings this week, saw their shares fall as a result of unexpectedly bad reports from other tech titans.

In three of the previous four quarters, the two corporations both missed revenue targets. Meta releases its earnings after the market closes on Wednesday, with Amazon and Apple Inc. AAPL following on Thursday.

Earnings Expectations

Meta Platforms

  • Earnings: $1.89 per share
  • Revenue: $27.38 billion, Inc

  • Earnings: $0.21 per share
  • Revenue: $127.47 billion

Apple Inc

  • Earnings: $1.27 per share
  • Revenue: $88.77 billion

Read Next: Are Google Investors Overreacting As Parent Stock Slumps 6.5% Post Q3 Earnings? Analyst Says Results Disappointing, 'But Not Terrible'

Image: Unsplash

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