What does the future hold for US tech stocks? The coming weeks will tell, as eight of the most dominant technology companies report their results.
Microsoft Corp, Google parent Alphabet Inc, Amazon.com Inc, Snapchat parent Snap Inc, Twitter Inc, Facebook Inc, Apple Inc and Spotify AB are all scheduled to report quarterly results between now and the start of next month, with four of them scheduled to make their announcements on the same day.
The results will come after a difficult month for the tech companies.
Just more than two weeks ago, the worst drop in the Dow Jones average in eight months was led by sharp declines in technology stocks, mirrored on the NASDAQ.
That Wednesday, the best-performing stocks over the past year — which include the so-called FAANG companies: Facebook, Apple, Amazon, Netflix Inc and Google — took some of the biggest losses. Amazon was down 6.2 percent and Netflix 8.4 percent.
There were several factors contributing to the drop — with concerns over trade tensions between the US and China, and rising interest rates being the most prominent.
Tech companies tend to be highly leveraged, so they can be vulnerable to rising interest rates. The EU’s planned tax on technology firms is also putting them under pressure.
The first to report, on Wednesday, will be Microsoft, releasing first-quarter results. Attention will be focused on whether the company’s Azure cloud computing service drove growth. The platform has been taken up by a number of governments.
Next up, “Super Thursday” is to see Alphabet, Amazon, Snap and Twitter all report on the same day.
For Alphabet, Hargreaves Lansdown PLC in an analysis highlighted a recent 4.3 billion euro (US$4.96 billion) fine the EU slapped on Google, but said it expected growth in revenue numbers.
Separately, the company has been investing heavily in areas such as self-driving cars and cloud computing.
Amazon is expected to have enjoyed strong revenue growth, the analysts said, with services such as Prime and Alexa making increasing progress, as is the company’s Web services division.
Snap is also to report third-quarter results.
Investors saw some light earlier this month when chief executive Evan Spiegel said that he hoped the company would turn a profit next year.
Finally, Twitter is also to make a third-quarter announcement. In July, its shares dropped by more than 20 percent after it reported a drop of 1 million users following its action to delete fake and offensive accounts.
At the time, the social media platform told investors to expect user numbers to fall further as it took action to block fake accounts.
One of the most eagerly anticipated results are Facebook’s: Its third-quarter results are to be reported on Oct. 30.
In the summer, the company said that revenue growth would continue to slow in the second half of the year.
Daily and monthly active users on the Web site fell for the first time in the second quarter of the financial year.
When Apple reports on Nov. 1, the focus will be on whether the high price of the iPhones has affected the demand for the handsets.
Hargreaves Lansdown analysts said that they are hopeful of a strong result, but added that a slowdown in the US market’s first US$1 trillion company would not be taken well on the markets.
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