{"id":18119,"date":"2023-06-04T17:02:25","date_gmt":"2023-06-04T21:02:25","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/big-tech-is-driving-corporate-earnings-and-buoying-expectations-for-coming-months\/"},"modified":"2023-06-04T17:02:26","modified_gmt":"2023-06-04T21:02:26","slug":"big-tech-is-driving-corporate-earnings-and-buoying-expectations-for-coming-months","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=18119","title":{"rendered":"Big Tech is driving corporate earnings, and buoying expectations for coming months"},"content":{"rendered":"
\n

Heading into first-quarter earnings, Wall Street expected a bumpy ride. But Big Tech\u2019s rebound helped soften the landing, and analysts believe it will take similar support to save results ahead. <\/p>\n

\n

The tech industry\u2019s growth disappointed analysts through much of 2022, as digital demand sputtered after surging early in the COVID-19 pandemic, leading to a wave of layoffs. But since then, investors have largely done a 180 as companies like chip maker Nvidia Corp.
\n NVDA,
\n -1.11%<\/bg-quote>
\n have ridden AI hype through the stratosphere, while Apple Inc.
\n AAPL,
\n +0.48%<\/bg-quote>
\n put up a surprise increase in iPhone sales. Microsoft Corp.
\n MSFT,
\n +0.85%<\/bg-quote>
\n in April offered an upbeat offered an upbeat outlook, sending shares higher. Amazon.com Inc.
\n AMZN,
\n +1.21%<\/bg-quote>
\n faces concerns about its cloud-services revenue. But its stock has been up since its earnings anyway. <\/p>\n

Against that backdrop, Wall Street\u2019s second-quarter profit expectations have grown more pessimistic for all but two industries over the past three months, according to a FactSet report published on Thursday. Those two segments were FactSet\u2019s S&P 500 information technology sector \u2014 which includes Microsoft, Apple, Intel Corp.
\n INTC,
\n +0.58%<\/bg-quote>
\n and Nvidia \u2014 and communication services, with constituents including Alphabet Inc.
\n GOOGL,
\n +0.77%<\/bg-quote>,<\/span>
\n Meta Platforms Inc.
\n META,
\n <\/bg-quote>
\n and Netflix Inc.
\n NFLX,
\n -0.66%<\/bg-quote>.<\/span>\n <\/p>\n

Those estimates only rose modestly \u2014 1.3% and 1.7%, respectively. But FactSet Senior Earnings Analyst John Butters said in Thursday\u2019s report that Microsoft, Apple, Intel and Nvidia were all \u201csubstantial contributors\u201d to keeping the index\u2019s profits from falling more. Amazon, part of the consumer discretionary sector, was also a \u201csignificant\u201d contributor on that front. <\/p>\n

FactSet still expects the 500 companies that make up the index to post a 6.4% earnings-per-share decline in the second quarter overall. But even as inflation continues to tamp down consumer demand, Wall Street analysts expect a rebound in the second half of the year, and expect the index to eke out a 1.2% per-share profit gain for the year overall, still largely on the back of Big Tech. <\/p>\n

This week in earnings<\/h2>\n

RV-maker Thor Industries Inc.
\n THO,
\n +3.89%<\/bg-quote>
\n reports this week, amid a slowdown in RV demand. Elsewhere, results from United Natural Foods Inc.
\n UNFI,
\n +4.61%<\/bg-quote>
\n \u2014 Whole Foods\u2019 main distributor \u2014 J.M. Smucker Co.
\n SJM,
\n +2.82%<\/bg-quote>
\n and Campbell Soup Co.
\n CPB,
\n +1.62%<\/bg-quote>
\n will offer context on the trajectory of grocery prices. Online fashion marketplaces Stitch Fix Inc.
\n SFIX,
\n +8.26%<\/bg-quote>
\n and Rent the Runway Inc.
\n RENT,
\n +5.50%<\/bg-quote>
\n will also report, following mixed results from other clothing makers or retailers. Gitlab Inc.
\n GTLB,
\n -6.15%<\/bg-quote>
\n and DocuSign Inc.
\n DOCU,
\n +0.47%<\/bg-quote>
\n also report during the week. <\/p>\n

The call to put on your calendar<\/strong><\/h2>\n

Little-known companies, higher-income consumers:<\/strong> Wealthier consumers have helped buoy sales trends at Nordstrom Inc.
\n JWN,
\n +9.24%<\/bg-quote>,<\/span>
\n Urban Outfitters Inc.
\n URBN,
\n +3.74%<\/bg-quote>
\n and even Walmart Inc.
\n WMT,
\n +0.96%<\/bg-quote>,<\/span>
\n as higher prices for necessities intensify the search for discounts. This week, companies like premium winemaker Duckhorn Portfolio Inc.
\n NAPA,
\n +5.74%<\/bg-quote>
\n and ski-resort operator Vail Resorts Inc.
\n MTN,
\n +1.94%<\/bg-quote>
\n could lend further insight on how those customers are living and spending at the moment. Duckhorn has noted the \u201cresilience of our customers,\u201d and said it has benefited from wine\u2019s \u201cpremiumization.\u201d But Vail has noted that weather conditions in parts of the U.S. haven\u2019t always made for great skiing. Both companies report on Thursday. <\/p>\n

The number to watch<\/h2>\n

GameStop sales, stock price, \u2018Zelda\u2019 bump:<\/strong> Videogame retailer GameStop Corp.
\n GME,
\n +2.24%<\/bg-quote>
\n reports first-quarter results on Wednesday. The results, as they have been for the past two years, will be a check-in on meme-trader enthusiasm, which helped catapult the stock to new highs in 2021. Wedbush analyst Michael Pachter, in a research note on Friday, said the chain faces an array of challenges \u2014 from moves toward mobile gaming and subscription software, as well as a sales shift toward lower-margin hardware. But he said the company was tightening up on costs. And he said Nintendo Co. Ltd.\u2019s
\n 7974,
\n +1.61%<\/bg-quote>
\n new blockbuster game \u201cThe Legend of Zelda: Tears of the Kingdom\u201d led to lines outside of GameStop stores, and could \u201cconceivably drive north of $75 million of new software sales for GameStop\u201d in the second quarter. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Heading into first-quarter earnings, Wall Street expected a bumpy ride. But Big Tech\u2019s rebound helped soften the landing, and analysts believe it will take similar support to save results ahead. The tech industry\u2019s growth disappointed analysts through much of 2022, as digital demand sputtered after surging early in the COVID-19 pandemic, leading to a wave […]<\/p>\n","protected":false},"author":1,"featured_media":18120,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-18119","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nBig Tech is driving corporate earnings, and buoying expectations for coming months | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Heading into first-quarter earnings, Wall Street expected a bumpy ride. 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