Weekly equities forecast: Microsoft, Meta, Apple, Amazon

US tech stocks fell sharply last week, with the Nasdaq falling 2.5%, extending losses of 3.65% in the previous week. Underwhelming results from Tesla and Alphabet sparked the selloff, highlighting how high the bar had been set for magnificent seven earnings as these stocks helped to drive US indices to record highs this year.

Earnings from Apple, Amazon, Meta, and Microsoft could drive sentiment this week, in addition to the FOMC rate decision and NFP report.

Microsoft Q4 earnings preview

Microsoft is set to report fiscal Q4 earnings after the close on July 30. Expectations are EPS of $2.93 on revenue of $64.38 billion. This marks a 9.3% and 14.6% increase, respectively, compared to last year's period.

Beyond the headline figures, investors will be watching for sustained growth in Microsoft's cloud platform Azure, which has been fueling sales and earnings growth in previous quarters.

Azure has benefited from the AI boom as customers train and run AI workloads through the cloud platform. Cloud revenue is expected to reach $37.2 billion.

Furthermore, investors will also be watching closely commentary on AI as the firm has established itself as an early leader in the sector.

The share price has traded up 14% so far this year.

Meta Q2 earnings preview

Meta will report its second-quarter earnings after the market closes on Wednesday, July 31. Wall Street expects an EPS of $4.70 and a revenue of 38.29 billion.

In the previous quarter's report, Meta warned that total expenses in 2024 could be between $96 and $99 billion—more than previously expected owing to higher legal and infrastructure investment to support the ramping up of AI. The market will be keen to see if there are any further increases to expense projections and the impact of AI integration.

Meta has emphasised that AI integration in its products contributed to strong Q1 results. Investors will seek an update on how this could continue improving user engagement.

Elsewhere, advertising performance will also be in focus. Advertising revenues increased by a solid 27% in Q1, and investors will hope for a similar performance in Q2.

Apple Q3 earnings preview

Apple will release Q3 earnings on August 1, after the market closes. Wall Street expects EPS of $1.34 on revenue of $84.3 billion.

iPhone revenue is still the bellwether for the Apple business, making up the majority of total revenue. iPhone sales have seen headwinds amid slowing global cycles and greater competition in China, and attention will be on whether those headwinds are starting to evaporate. The latest figures from China suggest not, as Apple smartphone shipments to China dropped 6.7%. IPhone sales are expected to fall again this quarter to $37.7 billion from $45.96 billion in the previous quarter.

Gross margins will also be under the spotlight amid a steady upward trajectory over the past few years, lifted as the firm has bought more of its supply chain in-house and grown its IT services businesses. The service business is anticipated to continue its strong performance thanks to higher App Store sales and rising subscription services.

AI developments will also be closely watched, with any updates on Apple's new generative AI software, Apple Intelligence, also closely watched. Apple intelligence is expected to drive a device upgrade cycle that could boost iPhone and iPad sales.

Amazon Q2 earnings preview

Amazon is scheduled to release earnings after the market closes on August 1. Wall Street expects EPS of $1.01 and revenue of $148.54 billion, while Amazon guides for 144.00 billion to $149.00 billion.

The results come as the share price has had a strong start to the year, rising 21% so far this year. EBIT is expected to increase 17% in Q2 and 10% in Q3, boosted by improved profitability in Norther America and accelerated growth of Amazon Web Services.

E-commerce and advertising had a strong showing in Q1, which investors will be keen to see continue this quarter.

While the chart shows that the long-term trend is up, in the near term, the share price has corrected from its ATH, bringing the share price to the July low and the RSI into oversold territory. Bulls, respecting the long-term trend, could look to retest the ATH at 200. Meanwhile, sellers could look to break out below the rising channel and monthly low below 176 to create a lower low.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.