The busiest week of profits season will start, with Tesla and Big Tech companies expected to control the headlines.
The 6 largest companies in the S&P 500 index SPX, +1.09% will report earnings in the week ahead, as about a 3rd of the index exposes first-quarter numbers. Strong efficiencies by the tech giants helped offset weaker efficiency by numerous other sectors previously in the COVID-19 pandemic, and investors will get a sense of whether that momentum can continue as the world starts to reopen.
Among the S&P 500’s latest members, Tesla Inc. TSLA, +1.35 %, leads off the week Monday afternoon. The business currently reported first-quarter deliveries that vastly surpassed expectations, so investors will be looking for ideas on Tesla’s incomes call about how the rest of the year could turn out. The consensus projection presently requires about 800,000 shipments over the course of 2021.
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Microsoft Corp. MSFT, +1.55% and Alphabet Inc. GOOG, +2.09% GOOGL, +2.10% follow Tuesday afternoon with two portraits of the cloud-computing landscape.
Microsoft’s Azure cloud service “might decently slow down” in March-quarter results, Cowen & Co.’s J. Derrick Wood wrote in a note to clients, however he anticipates a velocity in total growth driven by improving need for items like the Workplace suite in the middle of the economic healing along with strong personal-computer deliveries that could assist the Windows company.
Alphabet seems to be showing “continual strength in the cloud,” wrote Jefferies analyst Brent Thill, who anticipates that part of business to take advantage of “bottled-up need” as the year goes on. He also expects an acceleration in ad momentum.
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Another take on the ad landscape will originate from Facebook Inc. FB, +1.55% on Wednesday afternoon, following Snap Inc.’s SNAP, +7.45% report that revealed healthy marketing spending. The biggest growth drivers for Facebook could be increasing profits from Instagram Stories and development in impressions on the core Facebook and Instagram mobile feeds, wrote Cowen’s John Blackledge.
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Apple Inc. AAPL, +1.80% was a strong pandemic beneficiary as its iPad and Mac categories saw robust growth from the remote-work boom, and Morgan Stanley’s Katy Huberty argues that the strength in those classifications may have actually sped up into the March quarter. Her forecasts call for 53% development in the Mac organization and 52% development in the iPad service when Apple posts results Wednesday afternoon.
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Completing the week on Thursday afternoon is Amazon.com Inc. AMZN, +0.96% It was another big pandemic winner in the middle of a boom in online shopping, and there’s admittedly “no simple driver in sight” for Amazon nowadays, wrote Bernstein expert Mark Shmulik. Still, he points to “favorable company momentum and appealing secular development everywhere we look.”
Considering the very first quarter, he expects the company to benefit from continued strength in e-commerce and the arrival of stimulus checks. Shmulik eventually expects an “acceleration in workload migration” for Amazon’s cloud service as workers go back to office life, however he confesses that may take a couple of quarters to turn out.
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Tesla and the tech titans are amongst 177 members of the S&P 500 that are set to report in the week ahead. The slate likewise consists of 10 Dow Jones Industrial Average DJIA, +0.67% elements, a 3rd of the blue-chip index’s components.
Corporate incomes have actually generally exceeded quotes so far, with a 73% beat rate for the S&P 500, according to JPMorgan expert Mislav Matejka. Approximately a quarter of the index has already delivered outcomes, and experts surveyed by FactSet anticipate that earnings rose in aggregate by 33.7% for the very first quarter. That’s up from the 15.7% that was anticipated since the end of December.
Here are some of the other highlights in the week ahead.
Big week for the Dow
Among the 10 Dow elements on the docket are Boeing Co. Bachelor’s Degree, +1.73% and Chevron Corp. CVX, +0.59 %, two business wanting to rebound from miserable current revenues performances.
Experts tracked by FactSet expect that Chevron’s earnings fell 31% in the March quarter, though that decline is not as steep as what Chevron published in the previous few quarters. Mizuho analyst Daniel Boyd expects that the most recent duration was a “challenging” quarter for Chevron as winter storms “adversely impacted Permian production, chemicals, and the Pasadena refinery in the Gulf Coast.” The company reports Friday early morning.
A lot more tech
While the five largest tech companies report today, there are a lot of other tech stalwarts lined up to report.
Advanced Micro Devices Inc. AMD, +4.68% is set to publish outcomes Tuesday afternoon after competing Intel Corp. INTC, -5.32% provided decreasing data-center sales that some experts attributed to competition from AMD. Even prior to Intel’s revenues, Cowen’s Matthew Ramsay wrote that “AMD’s incomes (and item roadmaps) have actually become much less unstable compared to Intel’s, and we anticipate more of the very same this quarter.”
Facebook won’t be the only social-media name in the spotlight, as Pinterest Inc. PINS, +4.17% reports Tuesday afternoon and Twitter Inc. TWTR, +4.21% reports Thursday afternoon.
Some aspects of Snap’s current report bode well for Pinterest, according to Wedbush analyst Ygal Arounian, who cited strength in classifications like retail, e-commerce and packaged products that are necessary classifications for Pinterest also. While the resuming appears to be assisting Snap’s user-engagement trends, it may hurt Pinterest’s, he cautioned.
Food for thought
A variety of food-related stocks are on the menu this coming week. Mondelez International Inc. MDLZ, -0.07% and Starbucks Corp. SBUX, +1.41% report Tuesday, while Domino’s Pizza Inc. DPZ, -0.26% and McDonald’s Corp. MCD, +0.70% post results Thursday.
One trend to look for with McDonald’s is early need for the company’s new chicken sandwiches, which presented in February. Third-party data show that the company “saw a widening space versus [quick-service] peers beginning in late February and continuing through March as an outcome primarily, in our view, of its brand-new much-anticipated Crispy Chicken sandwich,” wrote Jefferies analyst Andy Barish, who said that stimulus checks also might have given the business an increase.
Pay it forward
Numerous continues reading consumer costs will come from Visa Inc. V, +1.07% (Tuesday afternoon), PayPal Holdings Inc. PYPL, +1.43% (Wednesday afternoon) and Mastercard Inc. MA, +0.97% (Thursday morning). Some enhancements in travel patterns might assist Visa and Mastercard, while all 3 might gain from sustained traction in e-commerce.
For PayPal, financiers will be trying to find updates on the business’s efforts to introduce cryptocurrency into its community. PayPal started enabling U.S. users to purchase, sell, and hold bitcoin and other cryptocurrencies in their PayPal wallets late last year, something it stated was driving increased engagement with its app. More just recently, the company started enabling consumers to make online purchases using those crypto holdings, and management may share more about early patterns there.