Four Big Tech companies will report their Q2 earnings reports today after the Wall Street session closes. Reports are likely to have a big impact on a sentiment towards the tech sector and could impact overall market sentiment. In this commentary we provide a short preview of what to look at in statements from Alphabet (GOOGL.US), Amazon (AMZN.US), Apple (AAPL.US) and Facebook (FB.US).
Alphabet (GOOGL.US)
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Create account Try a demo Download mobile app Download mobile appQ2 earnings report from Twitter has been a warning sign for companies with high exposure to ad revenue. Alphabet is one such company with around 80% of its revenue coming from advertising. The company may mimic Twitter's performance and show ad revenue drop. However, focus will be also on non-core businesses like cloud, which had a perfect environment to thrive in the second quarter of 2020 as a lot of office workers worked from home. Alphabet rarely provides guidance and may continue to refrain from doing so amid pandemic uncertainty. Nevertheless, any hints on how business developed in May and June, when lockdowns were being eased, will be welcome.
Shares of Alphabet (GOOGL.US) slowed recently as moods on the global stock markets began to deteriorate. Stock continues to trade near all-time highs but there is a high degree of uncertainty surrounding upcoming earnings release. Potential drop in ad revenue could weigh on the stock in the coming days. Source: xStation5
Amazon (AMZN.US)
Coronavirus pandemic has boosted interest in e-commerce and it should be visible in Amazon's earnings report. Company forecasted Q2 revenue in the $75-81 billion range and the market expects it to be near the upper limit. As the e-commerce segment is expected to perform well, attention will be shifted to AWS cloud, which Amazon has been expanding recently. AWS importance for Amazon has been growing in recent years and the question is whether high, double-digit growth could be maintained. Results from Microsoft's cloud growth moderating but remaining high.
Amazon (AMZN.US) has been trading in a descending triangle pattern recently. Stock is moving towards the lower limit of the pattern at $2,935, which is additionally strengthened by the 23.6% retracement and 30-day exponential moving average. Breaking below it could trigger a deeper drop. Source: xStation5
Apple (AAPL.US)
When it comes to Apple, investors will look whether the company managed to improve its revenue against the same quarter in the previous year. Apple decided not to provide revenue guidance during the previous earnings release but partial data that was coming in throughout the quarter, especially from China, may hint at a solid quarter for the iPhone manufacturer. Market consensus points to a small revenue decline. Growth in services, segments that should see smaller Covid-19 disruptions, will also be on watch. Executives are likely to be asked during an earnings call about how recent riots and rise in Covid-19 cases impacted operations in the United States.
Apple (AAPL.US) tested support at 23.6% retracement recently but managed to recover. The stock trades slightly below all-time highs and today's report could provide new impulse for growth. However, lacklustre release could see share price return towards aforementioned retracement at $357. Source: xStation5
Facebook (FB.US)
Facebook delayed release of its earnings report by one day and will release results on Thursday, June 30. As the social media company generates most of its revenue from ads, ad revenue will be closely watched. Issue will be closely watched not only due to disappointing results from Twitter but also because of boycotts and company-specific issues that Facebook had to cope with recently. Executives of the company may also be asked about a stand-off with the EU authorities as well as recent hearings in the United States. Net profit and daily active user numbers will also catch an eye.
Facebook (FB.US) has been stuck in a sideways move since the beginning of June. Stock has moved lower recently but remains close to recent highs. The story for Facebook is the same as for Alphabet - should ad revenue disappoint, things can turn ugly. Zone ranging near 23.6% retracement will be the first support to watch should Facebook disappoint with earnings. Source: xStation5
