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In the last week of October, ahead of the US presidential election, ‘Big Tech’ companies leading the stock market will announce their third quarter earnings.
On the 29th (local time), Alphabet, Google’s parent company, which is considered a leader in the generative artificial intelligence (AI) competition, will announce its third quarter (July-September) results of this year. Cloud business and YouTube advertising sales are expected to remain solid, but artificial intelligence (AI)-related infrastructure investment and the risk of forced corporate division are considered variables.
Looking at the Wall Street consensus (forecast), Alphabet’s performance in the third quarter is at the level of $86.34 billion in sales and $1.85 in earnings per share (EPS). Goldman Sachs lowered Alphabet’s 12-month target price from $217 to $208.
Alphabet’s performance in the second quarter exceeded expectations for both sales and net profit, but its stock price plunged more than 8% in the two trading days after the earnings announcement was made on July 23. It is interpreted that the market’s anxiety that the investment in AI is large but does not immediately lead to sales has played a role.
Microsoft (MS), a leader in the generative AI market, will disclose its third quarter (first quarter of fiscal year 2025) performance on the 30th.
In addition to cloud business sales centered on Azure and the scale of AI investment, market attention is focused on mention of whether the company will invest in Bitcoin. Microsoft’s third quarter consensus was for sales of $64.49 billion and EPS of $3.09, respectively.
Whether Microsoft invests in Bitcoin also acts as a variable. This is because it was reported that ‘Bitcoin investment evaluation’ was included in the voting agenda for the annual general shareholders’ meeting submitted to the U.S. Securities and Exchange Commission (SEC) on the 24th. If you actually make an investment, it may affect the Bitcoin price, which is soaring due to expectations of Trump’s election.
On the same day, Facebook’s parent company Meta also announces its third quarter earnings. In addition to online advertising revenue, expectations are high for the expansion of AI-related businesses. The stock market consensus predicts sales of $40.27 billion and EPS of $3.31.
After signing a content use contract with a large media company for its AI chatbot service, Meta increased its usability through platforms operated by Meta, such as Facebook, Instagram, and WhatsApp. In addition, it is also of interest whether plans to diversify business related to large language models (LLM) will be mentioned.
On the 31st, Apple will reveal its third quarter (4th quarter of fiscal year 2024) performance. Sales of electronic devices such as the iPhone 16, Apple intelligence using AI, and expansion of the healthcare business are expected to be key factors. Compared to other big tech companies, Apple is diversifying its business beyond AI or electric vehicles.
The consensus for Apple’s third quarter performance is that it will record sales of $94.42 billion and EPS of $1.55. Market research company IDC announced that the company ranked second after Huawei in the Chinese smartphone market in the third quarter of this year, thanks to the launch of the new iPhone 16.
Amazon also plans to release its third quarter earnings on the same day as Apple. Expectations are high for sales from Amazon Web Services (AWS), its flagship business, AI investment and business expansion, and revitalization of online sales ahead of the year-end peak consumption season.
Amazon’s third-quarter consensus was for sales of $157.17 billion and EPS of $1.14. Previously, Amazon’s second quarter net profit exceeded Wall Street expectations, but overall sales fell below expectations due to sluggish advertising sales.
