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{"id":15074,"date":"2024-01-29T02:25:25","date_gmt":"2024-01-29T02:25:25","guid":{"rendered":"https:\/\/www.lsd.hu\/five-big-tech-companies-with-combined-market-value-of-over-10-trillion-to-report-earnings-this-week\/"},"modified":"2024-01-29T02:25:25","modified_gmt":"2024-01-29T02:25:25","slug":"five-big-tech-companies-with-combined-market-value-of-over-10-trillion-to-report-earnings-this-week","status":"publish","type":"post","link":"https:\/\/www.lsd.hu\/five-big-tech-companies-with-combined-market-value-of-over-10-trillion-to-report-earnings-this-week\/","title":{"rendered":"Five Big Tech companies with combined market value of over $10 trillion\u00a0to report\u00a0earnings this week"},"content":{"rendered":"


\n
\"\"<\/p>\n

Investors wondering where the S&P 500 is headed, at least for the next month or so, will want to pay attention to three key days this week.<\/p>\n

\n

Between Tuesday and Thursday, five Big Tech companies with a combined market value of more than $10 trillion\u00a0will report\u00a0<\/a>earnings: Microsoft<\/a> Corp., Alphabet<\/a> Inc., Meta Platforms<\/a> Inc., Amazon<\/a>.com Inc. and Apple<\/a> Inc. Meanwhile, the Federal Reserve will issue its decision on interest rates, followed by Chair Jerome Powell\u2019s press conference where he\u2019s expected to discuss the outlook ahead.<\/p>\n

The stakes couldn\u2019t be much higher, with the S&P 500 Index pushing deeper into record territory on bets that central bankers are poised to began easing monetary policies and tech behemoths like Microsoft getting more valuable by the day.<\/p>\n

\u201cTech disproportionately moved the market last year and big tech continues to have the biggest earnings power, so the results will be crucial for the markets,\u201d said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.<\/p>\n

After a shaky start to the year, the S&P 500 is rising again and on pace for a third monthly advance that\u2019s added more than 18% since late October, when the index hit a near-term low before Fed officials started signaling that rate hikes were over.\u00a0<\/p>\n

The rally is again being led by megacaps including Microsoft, Alphabet, Amazon.com, Nvidia<\/a> and Meta Platforms, which were responsible for a majority of the index\u2019s 24% gain last year as investors became captivated by the possibilities of artificial intelligence services. The so-called Magnificent Seven, which also includes Tesla<\/a> Inc., just hit a record 29% of the S&P 500 despite a slump in shares of the electric-vehicle maker that\u2019s erased more than $200 billion in market value just this month.<\/p>\n

AI Booming<\/h2>\n

Microsoft and Alphabet will kick off earnings on Tuesday after markets close. The two companies are among the best positioned to benefit from the AI boom after investing heavily in the field for years. Microsoft has been adding the\u00a0features<\/a>\u00a0to its suite of software products, and investors are betting that AI will soon start boosting profit and sales growth.<\/p>\n

On Wednesday, the focus shifts to the end of the Fed\u2019s January meeting, where it\u2019s expected to hold interest rates steady for a fourth-consecutive meeting. Traders will be primarily focused on what Powell and other policymakers have to say about the timing of easing. Recent data showing\u00a0inflation continuing to recede<\/a>\u00a0and resilient\u00a0US economic growth<\/a>\u00a0suggest central bankers won\u2019t be in a hurry to cut interest rates.<\/p>\n

Apple is the biggest draw on Thursday, when Amazon and Facebook-owner Meta Platforms also report in the afternoon. The iPhone maker has been dogged by concerns about revenue growth and is expected to report its first sales expansion in four quarters.<\/p>\n

Read more: Apple veteran instrumental to iPhone development leaves for electric-vehicle maker Rivian: \u2018Now is the time for me to move on\u2019<\/a><\/p>\n

With most of the megacaps in record territory, there are concerns that investors are over exposed to just a handful of stocks, which could open the door for some pain if quarterly results underwhelm.<\/p>\n

The Magnificent Seven stocks were again named the\u00a0most crowded trade<\/a>\u00a0in a Bank of America<\/a> survey of fund managers, according to a research note published by the bank last week.<\/p>\n

No Protection<\/h2>\n

Still, traders aren\u2019t rushing to scoop up hedges against declines, according to options market data.<\/p>\n

A gauge of projected price swings in Apple in the next three months is hovering near the lowest level in six years. Traders expect a 3.3% move in the stock in either direction a day after the results, which would be among the narrowest post-earnings swings in two years.<\/p>\n

Projected three-month volatility in Meta Platforms, which more than quadrupled since its November 2022 nadir, is at the lowest in two years. The cost of protection against a 10% decline in Microsoft in the next month is hovering near the lowest level since August relative to the cost of options that profit from a similar rally.<\/p>\n

Tesla demonstrated the risks last week after missing fourth-quarter earnings estimates and\u00a0warning<\/a>\u00a0that its sales growth would be \u201cnotably lower\u201d in 2024. The stock tumbled 12% the following day, its biggest drop in a year.<\/p>\n

Microsoft recently overtook Apple as the world\u2019s most valuable company with a market value above $3 trillion. The rally has made the stock even more expensive, at 33 times profits projected over the next 12 months compared with an average of 24 times over the past decade.<\/p>\n

To Jason Benowitz, senior portfolio manager at CI Roosevelt, there\u2019s no doubt the megacap trade is crowded. But that doesn\u2019t mean the stocks can\u2019t continue to rally with economic growth slowing and easing financial conditions.<\/p>\n

\u201cThere\u2019s a good reason for the crowded trade,\u201d he said. \u201cThe environment is good for them.\u201d<\/p>\n<\/div>\n

Subscribe to the Eye on AI newsletter to stay abreast of how AI is shaping the future of business. Sign up<\/a> for free.<\/div>\n\n","protected":false},"excerpt":{"rendered":"

Investors wondering where the S&P 500 is headed, at least for the next month or so, will want to pay attention to three key days this week. Between Tuesday and Thursday, five Big Tech companies with a combined market value of more than $10 trillion\u00a0will report\u00a0earnings: Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. […]<\/p>\n","protected":false},"author":1,"featured_media":15075,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[926,9326,911,1843,18741,206,18740,116],"class_list":["post-15074","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-big","tag-combined","tag-companies","tag-market","tag-reportearnings","tag-tech","tag-trillionto","tag-week"],"_links":{"self":[{"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/posts\/15074","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/comments?post=15074"}],"version-history":[{"count":0,"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/posts\/15074\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/media\/15075"}],"wp:attachment":[{"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/media?parent=15074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/categories?post=15074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lsd.hu\/wp-json\/wp\/v2\/tags?post=15074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}