Please note that the -1.9% earnings decline expected for the sector is less than half of the -4.8% decline expected three months back. This big-picture view of the ‘Big 7 players’ and the sector as a whole shows that the worst of the growth challenge is shifting into the rearview mirror.

As you can see above, the expectation is for the group to resume ‘regular/normal’ growth next year, but a lot of that is contingent on how the macroeconomic picture unfolds.īeyond these mega-cap players, total Q2 earnings for the Technology sector as a whole are expected to be down -4.4% from the same period last year on -0.1% lower revenues. The group’s phenomenal boost in 2021 partly reflected pulled forward demand from future periods that was in the process of getting adjusted last year and this year. As with Q2, estimates for full-year 2023 have notably increased as well. Please note that the +14.7% earnings growth and +8% revenue growth in Q2 today is up from +4% earnings growth and +4.3% revenue growth expected for the group three months back. This would follow the -2.5% drop in earnings on +4.9% higher revenues in 2023 Q1. The ‘Big 7 Tech Players’ as a whole for the current and coming periods in the context of what they achieved in the preceding period is expected to have +14.7% higher earnings in 2023 Q2 on +8% higher revenues. Of the remaining four members of this ‘club,’ Tesla has reported already, and Amazon, Apple, and Nvidia are not reporting this week. These topics will be front and center in this week’s earnings reports from three of the ‘Big 7 Tech players.’ Alphabet and Microsoft report after the market’s close on Tuesday (7/25), and Instagram parent Meta Platforms reports after the close on Wednesday (7/26). To the extent that we see viable business models in the days ahead that make use of AI, the so-called large language models beyond Nvidia selling more capable chips, and Microsoft starting to charge for new AI-driven bells and whistles in its Office productivity suite, the stock market excitement would be totally justified. That said, the stock market is essentially a discounting system of the future. Still, the innovation’s productivity-enhancing potential appears to be some ways off in the future. Surrounding it all is the AI debate, where we have already seen direct revenue impact from the likes of Nvidia and some ideas from Microsoft. Improved clarity on top-line trends will help solidify the nascent favorable revisions trend and undergird the group’s impressive stock market momentum. A big part of Tech’s improved earnings outlook over the last few months has been a function of more effective cost controls that have helped stabilize margins. With many Tech companies on deck to report June-quarter results this week, the market will be looking for more color on business spending trends, particularly on the cloud side. Driving this momentum has been a combination of favorable developments on the macro front, primarily growing clarity surrounding the Fed’s tightening cycle, optimism about the impact of artificial intelligence (AI) that some view warily as reminders of the late 1990s, and an emerging sense that the worst of Tech spending headwinds is either behind us or close to that stage. Tech stocks have been standout performers in the market this year. Will Big Tech Earnings Keep the Rally Going? This week’s list includes Nvidia NVDA, Alphabet GOOGL, Meta Platforms META, Snap SNAP and Microsoft MSFT. Chicago, IL – J– releases the list of companies likely to issue earnings surprises.

Snap stock google