The big tech earnings flow picks up pace this week, with five of the seven companies belonging to the ‘Magnificent Seven’ reporting this week. Deepwater Asset Management’s Gene Munster on Monday called it a “Big week for Big Tech” and delved into the “pressure points” for each of these companies.
What Happened: Apart from earnings from Apple, Inc. (NASDAQ:AAPL), Microsoft Corp. (NASDAQ:MSFT), Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:META) and Amazon, Inc. (NASDAQ:AMZN), the week will also witness the commencement of Vision Pro deliveries on Friday, said Munster.
Here’s what he sees as pressure points for these companies:
Microsoft:
Potential contributions from Windows and Office Copilot in 2024
Azure growth in line with the 29% growth reported for the September quarter
Alphabet:
Managing commentary regarding Gemini Ultra’s impact on Search
Cloud revenue growth greater than September quarter’s 23% growth
Apple:
Information on the foundation model release in 2024
Growth of installed base of active devices
Meta:
Timing of AI contribution
Amazon
AWS growth over the 12.3% reported for the September quarter
On Vision Pro, Munster noted that it is the first major new product category for Apple since 2015. The venture capitalist said he would look for the number of apps available during its release. A number above “50” is considered positive, he said.
See Also: Best Technology Stocks
Why It’s Important: The heavy weightings of the “Mag 7” stocks in the key indices means they can take the market in the direction they are headed.
Six of the seven “Mag 7” companies, with the exception of Tesla, Inc. (NASDAQ:TSLA), are expected to be the top six positive contributors to year-over-year profit growth of S&P 500 companies. Factset said in the latest installment of its weekly earnings insight report.
About 53.7% of the year-over-year growth will be accounted for by these companies, and if their contribution were excluded, the blended earnings growth of the remaining 494 S&P 500 companies would be a negative 10.5%. Including their contribution, earnings are expected to fall a more modest 1.4%.
With ad spending improving, ad-dependent companies such as Meta and Alphabet are expected to see an improvement in topline growth….
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