This week sees earnings reports from Amazon.com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOGL), Meta Platforms Inc (NASDAQ:META), and Match Group (NASDAQ:MTCH), the owner of Tinder. After a year-end rally that pushed stock valuations higher, the upcoming results might need to be pretty impressive to stir a rather subdued market.
Ahead of these earnings announcements, RBC Capital Markets analysts have highlighted Amazon and Meta as their preferred choices. They are focusing on whether artificial intelligence can keep sparking interest without boosting revenue, how China’s economic slowdown affects the market, and the extent of growth in the Cloud sector.
Delving into the insights of RBC Capital’s analysts, spearheaded by Brad Erickson, he said, “Given how the market has rebounded over the last few months, risk/rewards are more balanced, in our view, but with such strong fundamentals likely on the way, we stay the course on Amazon and Meta.”
Amazon
With an outperform rating and a $180 price target — both unchanged here — RBC expects Amazon to beat market expectations of fourth-quarter earnings per shares of 79 cents with year-on-year growth in revenues of 11.4% to $166.2 billion.
RBC is looking for acceleration in Amazon’s AWS cloud offering, saying the “bigger concern is whether Microsoft is gaining more meaningful market share.”
Erickson said: “We’d expect a continued narrative of operational and fulfilment improvements and efficiencies, and we believe expectations to achieve or beat through the year remain reasonable.”
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Meta Platforms
RBC held its outperform rating and $400 price target and expects the Facebook owner to beat market expectations of $2.85 earnings per share, with annual revenue growth of 7% to $30.84 billion for the fourth quarter.
While Chinese e-commerce is a potential headwind, RBC expects that increasing adoption by advertisers of its Advantage+ offering to be a key driver.
Erickson said: “Given the consistent success we’ve heard with A+ in terms of conversion improvement, we believe this could actually be a potentially bigger tailwind than initial A+ adoption was in 2023.”
Alphabet
With an unchanged rating or outperform and price target of $155, RBC expects a slight earnings…
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