Mega Cap Tech Reports Earnings
Starting today, Microsoft and Alphabet (Google) will report their fourth-quarter earnings. Then on Thursday, Meta and Apple, followed by Amazon on Friday.
Starting today, Microsoft and Alphabet (Google) will report their fourth-quarter earnings. Then on Thursday, Meta and Apple, followed by Amazon on Friday.
Below are charts for those stocks, showing the last 5 years' worth of revenue estimates and whether or not they beat those estimates.
On average, they've only missed around 4 quarters over the last 20 quarters, which is shocking in and of itself.
Most of these revenue misses occurred in the first half of 2022, which makes sense given the state of the markets and economy at that time.
Now, these companies have collectively grown by trillions of dollars, delivering high double-digit returns over the last year. The estimates are high, but likely for good reason.
These companies spent all of 2022 preparing for a recession that never came. They have excess horsepower because they hoarded it for so long. They also now have the power of AI as well.
Microsoft, Google, and Meta will likely provide the most interesting AI updates, because they are building the products that could change how businesses run — starting with Microsoft Copilot and similarly Google’s integration of Bard into its productivity suite. Amazon's update will also be interesting, especially regarding their AWS + AI developments.
Also in focus will be the capex that these companies spent in the fourth quarter. A significant portion of that capex will have likely went into semiconductors.
I expect a decent quarter for these companies, but we will find out for sure this week.
Let’s hope for a 5 for 5 on the green dots.
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