A powerhouse line-up of earnings releasing today is expected to show that even amid unstable politics and the coronavirus pandemic, major tech companies are on a solid financial footing.
US-based Amazon, Apple, Facebook, Twitter and Google-parent Alphabet are all expected to announce how their companies have performed in the third quarter of this year.
“The reality is that the strong are getting stronger with names such as Amazon, Facebook, Google and Apple beneficiaries of the current environment,” said analysts.
They added that robust financial outcomes expected from the tech giants would highlight their “outsized” power and put a “strong spotlight” on them in terms of antitrust concerns.
Advertisement revenue
The digital ad market, which seemed to be recovering from a hit it took early in the pandemic, according to analysts, is dominated by Alphabet and Facebook.
And although far smaller in terms of making money, Twitter is likely to have seen advertising gains in the quarter as people tune in for feedback on US elections and live sports held amid pandemic concerns.
In the quarter, Facebook probably saw its user ranks and its revenue rise, even amid an ad boycott calling for more substantive curbs on hateful content.
With the help of online video site YouTube, Alphabet is also expected to see ad revenue growth return.
Despite critiques of online platforms, when it comes to investing marketing money, advertisers seem to favor established online venues like Facebook and Google.
Cloud services
Investors are interested in the cloud sector of Google, as well as the recent extension of its innovative driverless ride service.
In September, Waymo, Alphabet’s autonomous car unit, opened its robo-taxi project to the general public in the US city of Phoenix. Although not likely to be a money-maker yet, Waymo promises to be a rare Alphabet “moonshot” that eventually becomes a viable stand-alone business.
In the meantime, Google and Amazon are rivals in a fast-growing market for cloud computing, which has seen a surge in demand as people work, learn, shop and socialize online because of the pandemic. It is expected that both businesses will display how their cloud companies are flourishing.
eCommerce
The eCommerce sales engine of Amazon is likely to continue to revive as customers stay away from real-world stores and go online for food, clothing, business supplies and more.
While the event took place after the end of the third quarter, investors would be curious to know how Amazon’s recent Prime Day sales went, as well as whether, amid the heavy load, the company’s distribution operations were getting back up to speed.
The iPhone makers
With the support of a flourishing business selling digital products and services to fans of its mobile devices, Apple is expected to meet earnings expectations.
According to experts, Apple’s third quarter earnings figures would take a “back seat” for investors who would much rather prefer any glimpses company managers offer into demand for newly released iPhone 12 models.
The analyst noted that an analysis of the supply chain of Apple suggests anticipation for blockbuster demand for iPhone 12.
“We continue to see the path higher for tech stocks given the underlying fundamental drivers that should be front and center during 3Q earnings,” experts said.
“In a nutshell, we are still in the middle innings of a paradigm change for tech stocks with WFH (working from home), cloud, eCommerce and cyber security trends leading the way,” they added.
