The 2024 Q2 earnings season is in full swing, with the upcoming week poised to feature an array of significant reports. The financial landscape has remained largely positive, with major banks’ performances failing to evoke widespread fear.
Looking ahead, the stage is set for several esteemed members of the Mag 7 group to unveil their earnings, including Meta Platforms META, Amazon AMZN, and Apple AAPL. These tech giants have been star performers in 2024, prompting curiosity about the sustainability of their success.
Let’s delve deeper into how these industry behemoths are positioned as they gear up for their earnings disclosures.
Apple’s China Sales Dynamics
Apple’s stock faced scrutiny earlier in 2024 due to a sluggish start but has gradually gained momentum, boasting a 14% year-to-date surge. Worries surrounding the Chinese market and AI competitiveness initially dampened spirits but have since subsided temporarily.
The company holds a Zacks Rank #2 (Buy), with anticipated earnings for the upcoming period showing a positive trajectory over recent months. Projections indicate a 6% YoY increase to $1.34, with sales also expected to climb by 2.7%.
While China posed challenges for Apple, recent positive developments in iPhone shipments in the region have instilled confidence. Attention will also be on Apple’s Services segment, a consistent growth contributor that has helped mitigate reliance on iPhone sales.
Amazon’s AWS Performance Evaluation
AMZN exhibited robust performance in its latest quarter, with operating income skyrocketing by 220% YoY to $15.3 billion. Of particular note, AWS delivered stellar outcomes, with net sales of $25 billion reflecting a 17% YoY uptick and breaking a trend of recent underwhelming figures.
Earnings and revenue forecasts for the upcoming release have been relatively conservative. However, substantial growth is anticipated, with an expected 63% rise in EPS on a 10% increase in sales. Enhanced cost management and operational efficiencies have significantly bolstered profitability, leading to notable margin expansion.
Meta Platforms CapEx Examination
META has witnessed a marked improvement in operational efficiencies, driving a substantial uptick in profitability in recent quarters.
Investor focus will be on CapEx trends related to AI, an area also scrutinized during Alphabet’s latest earnings report. Earnings estimates for the upcoming release have shown an upward trend in recent months, with an expected $4.69 per share reflecting a robust 45% YoY growth.
In terms of key metrics, the Zacks Consensus Estimate for Advertising revenue stands at $37.5 billion, marking a 20% increase from the prior year. Notably, Alphabet’s Advertising segment displayed favorable performance, with sales climbing 12% YoY to $64.6 billion.
META experienced a notable stock plunge following its last quarterly results, attributed to a higher CapEx guidance for the fiscal year. Investors will closely monitor this development, especially after Alphabet’s revelation of higher-than-expected CapEx figures.
Wrapping Up
The 2024 Q2 earnings season is in full swing, with a packed reporting schedule indicating another period of positivity. The tech sector is anticipated to deliver another resounding performance, with several Mag 7 members, including Meta Platforms META, Amazon AMZN, and Apple AAPL, set to share their financial results. Given their momentum in 2024, this week may indeed shape up to be the most crucial in the overall Q2 cycle.
Analysts may be underestimating certain stocks greatly. When they unveil their earnings data, there could be an immediate surge of 10-20%.
