Welcome to Extreme Investor Network, where we provide expert insights and unique information on investing to help you make informed decisions in the financial market. Today, we are diving into the key litmus test facing Wall Street with the upcoming earnings results from megacap technology giants Apple and Amazon.
The Nasdaq slumped 2% after Microsoft issued disappointing revenue guidance and Meta Platforms warned of heightened AI-related costs. Despite topping Wall Street’s estimates, both tech giants, Apple and Amazon, fell on Thursday. Investors are closely watching for signs of a payoff from the hefty investments these companies have been making, particularly in capital expenditures.
For Apple, investors are eager to see the latest iPhone gaining momentum and are looking for insights into when the company’s AI initiative will start boosting sales. Meanwhile, analysts are searching for a reacceleration in Amazon Web Services growth. Analysts expect Amazon to post earnings of $1.14 per share on revenue totaling $157.2 billion, reflecting about 10% revenue growth from the year-ago period. On the other hand, Wall Street expects Apple to report EPS of $1.60 on $94.58 billion in revenue.
Amazon is described as the “most controversial” megacap heading into earnings, with particular focus on the company’s capex plans and the acceleration of its AWS cloud computing division. Analysts anticipate AWS revenues to hit $27.52 billion, with optimism around AWS growth potential and the company’s valuation at current levels.
On the Apple front, analysts are looking for signs of strong demand for its latest iPhone model and updates on its AI strategy with the launch of Apple Intelligence. Despite concerns over the iPhone 16 model’s ability to drive an upgrade cycle, many analysts are expecting in-line or stronger-than-expected results for the September quarter driven by solid services growth. The uncertainty lies in the outlook for the December quarter, but the launch of Apple Intelligence could be a game-changer in fueling demand.
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