Hedge funds are closely watching earnings reports from major tech companies, with Alphabet's strong results boosting investor sentiment. Microsoft and Meta Platforms will report after the market closes on Wednesday, followed by Amazon on Thursday, all of which are heavily held by hedge funds. Rising short positions in Microsoft and Meta suggest potential volatility post-earnings, while Apple will also announce its quarterly results on Thursday.
Meta is set to report its Q3 earnings, with analysts expecting earnings per share of $5.25 and revenue of $40.29 billion, reflecting an 18% year-over-year growth. The company's stock has surged nearly 70% this year, bolstered by strong earnings and significant investments in AI, despite concerns over slowing revenue growth. Meta's Reality Labs division continues to face challenges, with high expenses overshadowing sales, but excitement around its Orion AR glasses and Ray-Ban smart glasses may drive consumer interest.
Microsoft and Meta are facing increased investor scrutiny regarding the return on their substantial investments in artificial intelligence as they prepare to report earnings. Microsoft's capital expenditure is estimated at $14.6 billion for the last quarter, reflecting a more than 45% increase year-over-year, while Meta's spending is projected to rise nearly 70% to $11 billion.
The Nasdaq Composite reached a new high, with notable stock movements including a 1.2% rise for Microsoft and a 27% increase for Meta Platforms over the past three months. Advanced Micro Devices saw a 7% drop in after-hours trading despite a strong earnings report, while Eli Lilly and other pharma companies are set to report soon. Homebuilders are struggling, with the SPDR S&P Homebuilders ETF down 8.6% since mid-October, reflecting rising yields impacting the sector.
S&P 500 futures rose as Alphabet's shares jumped 5% following strong earnings, exceeding expectations with $88.27 billion in revenue. The Nasdaq Composite hit a record high, driven by tech stocks, while investors await GDP growth data expected at 3.1% for Q3. Chipotle's mixed results led to a 3% dip in shares, and Chewy fell nearly 2% after meme stock leader Keith Gill dissolved his stake.
Options markets indicate a calm among investors ahead of earnings reports from major tech firms, with expected moves aligning closely with historical swings. Notably, only Meta Platforms shows a significant discrepancy, as its past volatility contrasts sharply with the current 7% implied move.
Wall Street faced significant losses as disappointing earnings from major tech firms, including Microsoft and Meta, triggered a sell-off, with the NASDAQ dropping 2.76%. Japanese stocks rallied despite the yen weakening after the ruling party lost its parliamentary majority, while Chinese equities fell following a lack of new fiscal measures despite recent stimulus efforts.
Meta Platforms Inc. is reportedly developing its own AI search engine to gather information from the web for its AI chatbot. This initiative aims to lessen the company's reliance on Google and Microsoft’s Bing, which currently supply data on news, sports, and stocks.
Nvidia Corp. is poised for a critical week as earnings reports from major clients like Microsoft, Alphabet, Amazon, and Meta are set to influence its stock, which is near an all-time high due to AI optimism. These companies represented over 40% of Nvidia's sales in the second quarter, making their capital spending insights vital for assessing demand for Nvidia's AI-focused chips.
U.S. equity futures rose as investors anticipated earnings from major tech companies, boosting the Nasdaq Composite to new heights. A decline in oil prices and a stabilizing geopolitical situation contributed to positive market sentiment. This week marks a busy earnings season, with key reports from Alphabet, Microsoft, Meta, Amazon, and Apple, alongside important economic data releases.
Seems like the connection with the server has been lost. It can be due to poor or broken network. Please hang on while we're trying to reconnect...
Oh snap! Failed to reconnect with the server. This is typically caused by a longer network outage, or if the server has been taken down. You can try to reconnect, but if that does not work, you need to reload the page.
Oh man! The server rejected the attempt to reconnect. The only option now is to reload the page, but be prepared that it won't work, since this is typically caused by a failure on the server.
