Wall Street’s expectations for Amazon and Apple’s after-hours earnings | Wilnesh News
Wall Street faces another key litmus test Thursday with earnings results from big tech giants Apple and Amazon. The Nasdaq fell 2% after Microsoft issued disappointing revenue guidance and Meta Platforms warned of rising costs related to artificial intelligence. Both tech giants fell on Thursday despite beating Wall Street expectations. For investors looking for signs of returns on these massive investments, capital spending remains top of mind. For Apple, Wall Street is also hoping to see sales of its latest iPhones pick up, while investors want to know more about when the company’s artificial intelligence plans will start boosting sales. Meanwhile, analysts are looking for signs that Amazon Web Services’ growth is reaccelerating. Analysts polled by London Stock Exchange Group (LSEG) expected Amazon to earn $1.14 per share on revenue of $157.2 billion. This would reflect revenue growth of approximately 10% compared with the same period last year. Wall Street expected Apple to earn $1.60 per share on revenue of $94.58 billion. Amazon Oppenheimer’s Jason Hefstein calls Amazon the “most controversial” giant capital in earnings. In addition to the company’s capital spending plans, Wall Street will also want to see evidence that its Amazon Web Services cloud computing unit is accelerating after a period of lagging growth, with analysts polled by StreetAccount expecting revenue of $27.52 billion. Dollar. Jefferies analyst Brent Thill said the operating income guidance was disappointing given the stock’s outperformance so far this year, as well as consumer weakness, AWS margin constraints and costs related to the Kuiper satellite program. Disappointment worries that the e-commerce giant’s settings are “somewhat harsh.” The stock price will rise 22% in 2024. Amazon previously said operating income would be between $11.5 billion and $15 billion. Thill believes AWS’s growth is achievable and said “revenue fundamentals look solid.” He expects AWS to accelerate to 20% in the third quarter and 21% in the current period, and said the current valuation is attractive. Bank of America’s Justin Post said the latest results from Alphabet’s cloud unit could be a “positive read” for Amazon. The search giant’s cloud revenue accelerated this week, beating Wall Street expectations and rising about 35% from a year ago. “There has been some noise in operating earnings recently, but we believe this is being fully understood, and we are encouraged by strong growth in AWS and continued discipline across the business,” said JPMorgan’s Doug Anmuth. Goldman Sachs analyst Eric Sheridan It is also expected that AWS’s business will continue to grow as artificial intelligence workloads increase, and the company is expected to benefit from strong e-commerce demand and a booming advertising environment. He kept his $230 price target on the company unchanged, which would imply a 19% upside from Wednesday’s closing price. Amazon’s retail business remains a top concern on Wall Street ahead of the busy holiday shopping season. Citibank’s Ronald Joshi said improvements in retail should help offset some of the higher costs of Amazon’s satellite plans. “Amazon remains one of our top picks in the Internet space and believes growth in essentials, faster shipping and higher conversion rates can lead to strong retail results as demand for AWS continues to improve,” he wrote. Apple For its part, Wall Street is eagerly looking for signs of strong demand for its latest iPhone models and updates on its artificial intelligence strategy. Apple shares fell earlier this year as investors worried about the company’s lack of an artificial intelligence strategy. That changed in September, when the iPhone maker announced Apple Intelligence and opened beta testing mode to consumers this week. Analysts have expressed concerns about the iPhone 16 model and whether it can actually drive the previously expected massive upgrade cycle, with Morgan Stanley analyst Erik Woodring calling demand “mixed.” Jefferies analyst Edison Lee covered the stock earlier this month and downgraded the stock to Hold while waiting for “Apple to mature.” “We like Apple Intelligence LT because AAPL is the only hardware and software integrator that can leverage proprietary data to provide low-cost, personalized AI services. But smartphone hardware needs to be reworked before it can have true AI capabilities. It will take time Table may be 2026/27,” he wrote. Many analysts expect the tech giant to report September quarter results that are in line with or stronger than expectations, driven by strong growth in services. The outlook for this season (through December) looks even more uncertain. JPMorgan’s Samik Chatterjee noted that despite improvements in early sales figures, sales of the new models still lag last year’s iPhone 15 sales. The analyst lowered his revenue forecast for the current quarter but expects revenue to improve in the new fiscal year as the launch of Apple Intelligence stimulates demand. Many analysts see a deeper understanding of this new artificial intelligence strategy and when demand will begin to ramp up as key comments in the report to watch, with DA Davidson’s Gil Luria noting that current data “gives no reason to believe that the upgrade cycle has begun.” Bank of America analyst Wamsi Mohan urged investors to “ignore the iPhone 16 noise.” He said his December service revenue and gross margin expectations were “too low” given early insights into the beta version of its artificial intelligence program it launched this week. “As Visual Intelligence, ChatGPT integration, and broader Apple Intelligence capabilities become more mainstream and improve over time, the value of personalization will likely become increasingly important,” he wrote. However, some Analysts believe the new iPhone faces a tricky road, with Barclays analyst Tim Long predicting that shipment expectations for the March and June quarters will be at risk. He maintains an underweight rating on the stock with a price target of $186, which would imply a 19% downside from Wednesday’s closing price. “We believe AAPL has a more optimistic view on IP16 sales following the June AI incident, but actual sales have been weaker given the negative data points,” Long wrote. “We now see 79 million in December to Q1 The downside risks to Taiwan’s forecast are greater than the upside risks.”
