After one of the worst years in recent memory for tech stocks, tech companies are trying to detail exactly how good, or perhaps how bad, the holiday season was.
Investors bracing for bad news after tech stocks fall in 2022. With Q4 results starting to roll out in the coming weeks, all eyes will be on news about where these very important companies are headed in his 2023.
Hundreds of companies will provide varying levels of guidance for 2022 results and years to come, with some more important than others. Here are his five tech giants that top the list of notable earnings, not just because of their individual importance, but because they provide insight into the tech sector as a whole.
Netflix as a precursor to streaming
Netflix Inc. NFLX,
2018 was the tech industry’s most turbulent year, and next year could be even more significant. Streaming video pioneers have also become a barometer for many media companies launching streaming services, enhancing the competitive landscape.
Netflix has already experienced a slowdown in new subscribers, and Q4 could be even worse. On Wall Street, however, he has two views on the company’s future performance. Barclay analyst Kannan Venkateshwar said Netflix could only get 2.7 million subscribers in the fourth quarter, well below management’s forecast of 4.5 million. I warned you. This quarter is also the first quarter that Netflix will no longer provide subscriber growth projections. This is a sign that Netflix is maturing and entering a slower growth phase, making the stock more volatile.
Netflix Earnings Preview: With Subscription Guidance Gone, Focus Is on Financial Forecasts
On the other side of that pessimism is Cowen & Co.’s John Blackledge. He believes Netflix will get even more subscribers than expected. A lower, ad-supported tier that launched in November.
“We believe Netflix is the best recession strategy in our coverage universe if macro conditions worsen, especially since the advertising layer is attractive to value-conscious consumers,” Blackledge wrote. increase.
Netflix was one of the first to report, with fourth-quarter results expected to be announced on Thursday, January 19.
intel, The struggling semiconductor giant
Intel INTC, a world-class semiconductor company,
It’s also the chip giant investors are most nervous about. Year-end sales earnings may provide answers to investors’ questions about demand for both the personal computer sector, where the company dominates as the largest chip provider, and data centers, once the biggest growth category.
As reported last week by two large market research firms, the PC market had its worst fourth quarter since IDC and Gartner began tracking industry growth.
From Therese: The PC boom and bust is already ‘in the record’, it’s not over yet
At the same time, the chip giant is undergoing a major turnaround effort under CEO Pat Gelsinger, revealing details of restructuring plans and ongoing job cuts that began in California and Oregon. There is a possibility. Intel has yet to reveal the total headcount it will cut as part of its plan to cut $3 billion in costs in 2023.
BofA Global Research analyst Vivek Arya said in a recent note, “There are even more concerns about Intel’s more aggressive pricing of its products to gain share and take advantage of increasing capacity. There is.” “Within data centers we saw some short-term caution and measured cloud/enterprise spending but recovered in the second half as new server CPU [central processing unit] Intel mentions significant delays in its recently announced Sapphire Rapids chips for data centers.
Investors are seeking further comment on the long-awaited delayed customer adoption of the chip, as well as the overall state of data center spending. This answer is from Advanced Micro Devices Inc. AMD,
Nvidia Corp. NVDA,
Intel is expected to report its fourth quarter earnings on January 26th.
Online advertising company Meta wants to change
Meta Platforms Inc.
Alphabet Inc.’s GOOGL faces the same problem as other companies suffering from the Internet advertising slump.
goog,
Google has some issues of its own. Investors will be watching to see if there is evidence that the tide is turning for Facebook’s parent company after Facebook’s ruler Mark Zuckerberg made a drastic change in strategy. right.
Wall Street struggled with the meta last year as Mr. Zuckerberg continued to invest relentlessly in his unproven vision of the metaverse becoming the next big thing. Q4 is usually big for internet companies and other consumer tech companies, but not great for Meta, whose earnings are expected to fall 6.5% on Wall Street. .
But JP Morgan analyst Doug Ammuth thinks a better future awaits. In mid-December, he upgraded Meta’s share price, which fell about 64% in 2022, believing more cost controls will come after showing signs of “increasing cost discipline.” said he believed Apple Inc.’s issues with the AAPL.
Privacy changes and their impact may be moderated. [return on investment]”
While Q4 results are already largely embedded in Meta’s stock, investors are focused on the company’s outlook, signs of improving ad spending, cost control and competition from TikTok.
Meta is expected to report fourth quarter earnings on February 1st.
Amazon and the End of the Pandemic Boom
Wall Street focuses on two aspects of Amazon.com Inc.’s AMZN.
Large businesses booming during the COVID-19 pandemic: e-commerce/online retail environments and cloud services businesses. Wall Street sees Amazon growth slow to 8.6% in 2022, fourth-quarter revenue 6.1, after biggest growth in years, including a whopping 37.6% revenue growth during the pandemic We expect it to slow down to %. Full-year earnings are expected to be positive on a net basis, primarily due to a significant investment in electric truck maker Rivian Automotive.
After two consecutive years of combined profits of nearly $55 billion in 2020 and 2021.
In addition to the slowdown in e-commerce, the company is witnessing a slowdown in its profitable Amazon Web Services business. Cowen & Co. analyst John Blackledge this week worked with UBS analyst Lloyd Walmsley to reconcile estimates. Blackledge now predicts that in 2023, he’ll see Amazon’s overall revenue increase by 8.5% due to macroeconomic headwinds. A key factor in his reduction in estimates was the slowdown in AWS, which saw him grow just 16% in 2023 after a 33% growth rate. In the last four quarters he has increased to 39%.
“Amazon’s 2023 operating profit growth is driven by easing inflationary pressures (wages, energy, supply chain), lower expected investment after historic spending in areas such as fulfillment and logistics over the past few years, and We expect this to be driven by decelerating exchange rates. [foreign exchange] drag,” Blackledge wrote.
Amazon has yet to announce its fourth quarter earnings date, but based on trends from the previous quarter, we expect it to be around February 2nd.
Salesforce, the cloud software barometer
Salesforce CRM, Inc.
The pioneering cloud software provider . executives are already joining other big tech companies by announcing massive job cuts as part of a cost-cutting effort after two years of unrestricted growth. .
Salesforce has certainly seen strong growth rates and become one of Wall Street’s favorites, but those days may be over. FactSet estimates that reporting fourth-quarter earnings in late February or early March will see Salesforce growth slow to about 17% in fiscal 2023 and about 10% in fiscal 2024. will be A decade of revenue growth ranging from 22% to 37%.
“Salesforce is in the penalty box. Pricing may be attractive, but the wheels risk falling off the name,” Bernstein Research analyst Mark Modler wrote last month in a memo on the software sector as a whole. He also said that cloud software is “not immune to recession weakness.”
Investors want to know if 10% growth will become the norm, and Salesforce’s outlook could have the most impact on the company’s performance. This may be the case since companies are usually the first to cut budgets in sales and marketing during difficult times, and Salesforce’s core customer relationship software is widely used in these departments. Also, widespread job cuts in the tech industry will affect the number of users, and therefore seats, in Slack Business.
Last year, Salesforce announced its fourth quarter results on March 1st.
