What to Expect in the Week Ahead (GOOGL, AAPL, META Earnings; Jobs Report)

Moomoo Breakfast US joined discussion · Oct 26 23:26

What to Expect in the Week Ahead (GOOGL, AAPL, META Earnings; Jobs Report)

Earnings Preview

Wall Street is bracing for the most eventful week of news leading up to the election.

Next week, five of the Magnificent Seven companies will announce their earnings. Alphabet will share its results on Tuesday, while Microsoft and Meta Platforms will release theirs on Wednesday. Amazon and Apple are scheduled to report their earnings on Thursday.

Google's parent company, $Alphabet-A (GOOGL.US)$ , is scheduled to announce its third-quarter earnings on Tuesday, following a strong performance in the second quarter that exceeded expectations, largely thanks to momentum in artificial intelligence.

It's noteworthy that Alphabet Inc. has consistently surpassed Wall Street's projections for both earnings per share (EPS) and revenue over the last four quarters. In the second quarter, the tech giant reported an EPS of $1.89, beating the forecast of $1.84.

The robust demand and growth in cloud services have fueled Alphabet's impressive 14% year-over-year growth in the latest quarter. This segment achieved a remarkable 28% increase in quarterly revenue, surpassing $10 billion for the first time.

In contrast, Google's advertising business—the foundation of its revenue—has experienced slower growth in recent quarters. Investors will be eager to assess how the company’s advertising revenue has fared in light of economic uncertainties and increased competition from rivals such as Meta Platforms Inc.

$Meta Platforms (META.US)$ will report earnings after the market closes Wednesday, with investors watching whether the social media giant's stock can keep up its strong performance so far this year.

Shares of Meta Platforms, the parent company of Facebook, have jumped nearly 60% in 2024, which is promising considering that Mark Zuckerberg's company has historically exceeded analysts' expectations 88% of the time.

On average, the stock has gained over 2% the day following each earnings report.

$Apple (AAPL.US)$ is scheduled to announce its Fiscal Q4 earnings on Thursday, October 31, after the market closes, as it seeks to sustain its recent positive momentum.

The company, known for its iPhones, iPads, and other products, is projected to report quarterly earnings of $1.54 per share, reflecting a year-over-year increase of 5.5%. Revenue is anticipated to reach $94.43 billion, also representing a 5.5% rise compared to the same quarter last year.

Investors are particularly focused on Apple’s performance in China. Recent third-party data from the region has yielded mixed results, creating uncertainty regarding future growth potential. Management's insights on the dynamics of the Chinese market will be critical for assessing the company’s outlook in this vital area, as any indications of declining demand may affect investor sentiment.

Apple is also making strides in artificial intelligence (AI), with Apple Intelligence features being integrated into its product offerings, showcasing the company’s dedication to innovation.

However, research and development (R&D) expenses are expected to see only modest increases, indicating that the company is taking a cautious approach to its AI investments.

Macroeconomic Events

There are important data releases on the docket, including a jobs report, inflation data, and a preliminary reading on third-quarter gross domestic product. Those releases could make for a heady mix for a market that’s already showing evidence of pre-election jitters.

The October jobs report due out Friday is expected to show the U.S. economy having added 140,000 jobs, according to economists polled by FactSet.

The September personal consumption expenditures, or PCE, price index out Thursday is forecast to show pricing pressures easing to 2%, down from 2.2%. Meanwhile, the first preliminary reading of the gross domestic product for the third quarter is expected to show a rise of 2.1%, down from 3% in the previous reading. The report is due Wednesday.

Elsewhere, investors are also anticipating the JOLTS survey, as well as the consumer confidence data, due out at the start of the week.