This week's U.S. profits: From Alphabet to Meta to Apple – 7 tech companies post record profits

Next week, five of the so-called Magnificent Seven tech giants are scheduled to report earnings, with common themes including investments in artificial intelligence, regulatory challenges and declining Chinese demand.

In addition to Microsoft, which just reached a historic $3 trillion market valuation, Alphabet Inc., Metaplatforms Inc., and Amazon.com Inc. are also expected to post record profits in the quarter, reflecting the strength of the U.S. economy. It highlights that. Still, questions are likely to be asked about further cost-cutting after both companies have embarked on significant job cuts in recent weeks.

Apple, which has been plagued by weak sales in China, antitrust accusations and the scars of a patent battle, gives investors a better sense of early demand for a new Vision Pro that some big developers are shunning. It might be possible. Boeing, mired in a safety crisis that caused the Federal Aviation Administration to freeze plans to increase production of the 737 Max, will face further questions about how it plans to allay concerns about the plane's quality.

Monday: No significant revenue.

Tuesday: Microsoft (MSFT US) is on track to post quarterly revenue growth of 16%. TD Cowen expects the Azure sector to perform well due to the return of cloud customers and rising demand for AI. Evercore said the monetization of its AI-powered virtual assistant, Copilot, will be scrutinized, but the product will not make a significant contribution to sales until the second half of this year.

• Alphabet (GOOGL US)'s earnings per share are expected to rise 52%, Jefferies said, driven by higher ad revenue in the year-end quarter and the strength of YouTube's NFL Sunday Ticket channel. Jeffries added that his Google Cloud division of the company should grow “steadily and incrementally” as customers prepare for his AI adoption.
• Advanced Micro Devices' (AMD US) exposure to AI will contribute to a 9.5% increase in sales. In contrast, Qualcomm (QCOM US) is expected to reveal stagnant sales in its announcement on Wednesday, despite a recovery in its handset and auto divisions.
• Starbucks (SBUX US)'s North American same-store sales growth rate is expected to be 5.8%, about half that of the same period last year. William Blair said domestic sales were volatile in November and December due to trade union strikes and social media calls for a boycott of the coffee chain over its response to the Israel-Hamas war. did.
• General Motors (GM US)'s vehicle deliveries were flat in the quarter as strikes cut production at four factories that make the company's best-selling models. Bloomberg Intelligence said that despite a 41% year-over-year increase in shipments, U.S. production likely exceeded sales after accounting for production losses during the strike, so profits were Bloomberg Intelligence said it could still beat expectations.
• UPS (UPS US)'s adjusted earnings per share are expected to decline by double digits for the fourth consecutive quarter, weighed down by rising costs associated with new labor contracts and sluggish shipping growth. Investors will want to assess the company's progress in recovering market share lost during difficult labor negotiations and hear about the impact of Red Sea shipping disruptions.

Wednesday: Boeing (BA US) is expected to report operating profit of $287 million, ending its fifth straight quarter of losses on increased commercial aircraft deliveries and strong service demand. Executives will face intense scrutiny over the company's next steps as growth ambitions are hurt by the Federal Aviation Administration's move to freeze plans to increase production of the 737 Max.

• Mastercard (MA US) could see its earnings per share rise 16% in the quarter as cost cuts offset slower sales growth and higher stock buybacks. Baird said 2024 corporate guidance should be in line with consensus.

Thursday: Evercore says Apple (AAPL US) could slightly beat profit estimates despite slowing sales in China, and patent dispute over the company's smartwatch should have little impact. he pointed out. Bank of America said early signs show strong demand for its Vision Pro headset, which, along with the iPhone's AI-driven features, could drive growth this year. Investors will want more details about an overhaul of the App Store and iPhone functionality in the European Union to appease regulators.

• Meta (META US)'s 2023 ad revenue growth was driven by Chinese e-commerce platforms, but given smoldering tensions between China and the US, Facebook's parent company Meta (META US) BI said it remains to be seen whether they can rely on the likes of Shane and Tem this year. As user engagement declines, Meta may need to focus on investing in large-scale language models to improve ad targeting.
• Amazon (AMZN US) could beat expectations for low-double-digit revenue growth (11% consensus) given a better-than-expected holiday season and sequential improvement in Amazon Web Services sales. BI said. The focus will be on adding advertising to the company's Prime Video service, as well as cloud order books and insights into consumer shopping trends.

Friday: Exxon Mobil (XOM US) warned in guidance issued this month that it would take a $2.5 billion writedown on some of its California operations. TD Cowen said tailwinds from gas trading and downstream derivatives boosted earnings, but the consensus forecast was for earnings per share to fall 35%. Lower oil prices are also weighing on Chevron's (CVX US) earnings, with earnings per share expected to fall 21% as higher LNG prices fail to offset lower refining margins.

• Charter Communications (CHTR US) investors may focus on broadband subscriber numbers after pay-TV customers were temporarily unable to watch the entertainment giant's channels due to a dispute with Walt Disney over pricing There is sex. BI said the end of promotional discounts could still boost broadband revenue by increasing average revenue per user.
• Cigna (CI US) earnings per share are likely to increase 32%, more than double from last quarter, on the back of medical customer growth and a largely stable medical loss rate. Health care costs, expected to rise 14% in the quarter, are a cause for concern, especially after health insurance peer Humana recently cut its forecast for higher-than-expected spending.