What to Expect from This Week's Earnings - Q3 2024
This week is packed with major earnings reports from companies like AMD, Alphabet, Microsoft, and Apple, just before U.S. elections—potentially impacting the stock market.
The week ahead promises to be exciting and packed with market-moving events! Major companies like AMD, Alphabet, Microsoft, Apple, Amazon, Visa, and McDonald's are all set to release their earnings reports. And, with these big announcements landing just before the U.S. presidential elections, we’re in for quite a ride!
Each of these events alone could impact the stock market, but together? The potential effects are even more intriguing.
With all that’s happening this week, I wanted to take a closer look at the stocks in my portfolio. I’ll be highlighting what I find particularly interesting and sharing the areas I’ll be watching closely in the future.
Alphabet
The company we all know for its search engine is facing troubles with regulators. Basically, some officials are saying their search business is a monopoly. Especially part that they have agreement with Apple to be default search option on their devices. We’ll see how this will play out for an Alphabet, but I think their search business actually competes with a lot of other platforms. Anywhere you can search for a product or information, that’s part of the search business of their competition. It is hard to tell that amazon/instagram/pinterest search box is not one more search "business".
What I’m really keeping an eye on is their Cloud business. It’s growing in revenue year over year and is now bigger than their YouTube ads and Google subscription/device segments! In a last five years its revenue growth was bigger than 20% on average and it actually made first time profit in the last year (2023).
Apple
There’s no investor out there who isn’t keeping an eye on Apple’s financial report. With a market cap of around $3.5 trillion, it’s one of the biggest publicly traded companies in the world. Everyone’s curious about how iPhone, iPad and Mac sales are going to look in the future, especially since we’ve seen a bit of a slowdown in sales lately.
I think Tim Cook is doing a great job transforming Apple from "just" a hardware company to one that focuses on both hardware and services. We’ve already seen signs of this in previous reports. Importance of this transition is huge, if we remember what happen to hardware companies in the past (IBM, Cisco) it is clear that good "software" must come together with hardware.
How to talk about Apple in Q3 without mentioning their AI integration for Apple devices. Behind all of the shiny animations and integrations to the regular apps on Apple devices as a biggest achievement for Apple engineers should be making all of these calculations directly on the device. As it was discussed by promo materials from Apple only the really heavy tasks get sent to the servers. This makes Apple’s AI way more privacy-focused compared to their competitors.
Amazon
The leader in its industry is reporting its third-quarter results on Thursday, and expectations are high that it’ll benefit from Amazon Prime Day, which they said was the best ever. Revenue numbers from this events should be seen in this quarter together with Amazon's increase in price for services of sellers.
Also, Amazon is the market leader among cloud providers, competing with Google Cloud and Microsoft Azure, both of which have been growing quickly since 2020. For now the growth of these two didn't make bigger impact on AWS market share but it is always good to keep an eye on that information.
That is it for this post, feel free to comment and to give your ideas about these companies.
Have a great day!