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Earnings Expectations
The expectations for earnings growth in the tech sector varies among companies . Amazon and NVIDIA , who are known for high valuations , are expected to deliver strong growth , while Apple and Microsoft exhibit more cautious forecasts . Alphabet and Meta fall in between , with potential for higher valuations in the latter half of the year . These differing outlooks are reflective of the challenges and opportunities present in the everchanging tech landscape .
FOREX . com analysis says results out from Tesla , Microsoft , Alphabet , Meta and Amazon so far present a mixed bag with the group generally beating expectations
but tempered by a more cautious outlook given the high level of economic and geopolitical uncertainty lingering over the horizon .
FOREX . com says Microsoft and Amazon both impressed thanks to their diverse business models and cloud-computing arms that are positioned to benefit from AI .
But Meta and Alphabet disappointed as markets fret over the outlook for advertising in 2024 and their ability to capitalise on new technology – while Tesla is being hurt by a combination of slower growth and tighter margins .
As for those yet to come , FOREX . com sees the bar looking far lower for NVIDIA than a few months ago , which bodes well for Wall Street ’ s favorite AI stock , while the jury is out ahead of Apple ’ s update as concerns grow about demand for the iPhone 15 and other hardware .
Joshua Warner , FOREX . com Market Analyst said : “ There are reasons to be cautiously upbeat about Big Tech as we head into the final quarter of the year , but markets are becoming increasingly pessimistic about what lies around the corner in 2024 as higher-for-longer interest rates , persistent inflation and a strong but weakening economy all play out .
“ The bears have made their presence known in recent months but still have more work to do before they push the bulls out entirely . The landscape for equities has become murkier , visibility is more limited and there are attractive opportunities elsewhere now that treasury yields have spiked to 16-year highs .
“ The valuation gap among the group of seven Big Tech members means there are challenges and opportunities ahead . Those with the lowest multiples that trade at a discount will become the most attractive when conditions finally improve , while some may have a tougher time justifying their valuations as the outlook becomes increasingly challenging .” � www . intelligentfin . tech
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