Please ensure Javascript is enabled for purposes of website accessibility

Earnings: 3 Megacap Tech Stocks to Watch Today

By Daniel Sparks - Feb 1, 2018 at 10:06AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

And you thought yesterday's turnout of tech stocks was impressive. Wait until you hear who's reporting earnings today.

Microsoft, Facebook, and PayPal were the tech stocks to watch yesterday. But Thursday brings with it a whole new set of megacap tech companies, including (AMZN 3.15%), Alphabet (GOOGL -0.21%) (GOOG -0.27%), and Apple (AAPL 1.62%).

Here's what investors should watch when these tech giants report for their most recent quarters.

The word technology over computer codes

Thursday will feature earnings reports from three tech giants. Image source: Getty Images.

Okay -- maybe they're not all technology stocks, but since the bulk of Amazon's operating profits come from its cloud business, and in light of its growing suite of Amazon-branded consumer technology hardware, the company is often considered a tech stock. Whatever sector you want to put Amazon in, the growing importance of technology to its overall business is impossible to ignore.

Amazon guided for fourth-quarter net sales to be between $56 billion and $60.5 billion, up 28% to 38% year over year. Management expects operating income to be between $300 million and $1.65 billion, up from $1.3 billion in the year-ago quarter.

Beyond looking for consolidated revenue at the high end of management's guidance range, investors should check on growth rates in two of its fastest-growing segments: subscription services and Amazon Web Services (AWS). The two segments saw year-over-year revenue growth of 59% and 42%, respectively, in Amazon's third quarter. Look for similar growth rates from these important growth catalysts in Q4.


After the company reported accelerating revenue growth in its third quarter, investors will eye reported quarterly revenue growth on Thursday closely. Revenue in Alphabet's third quarter increased 24% year over year to $27.8 billion. The increase was driven by a 21% year-over-year jump in Google advertising revenue and a 40% jump in "Google other" revenue.

Though "Google other" revenue only accounts for about 12% of Alphabet's total revenue, it's an important segment for investors to watch. Composed of crucial growth catalysts, including cloud, the Google Play app store, and Google-branded hardware, any meaningful deceleration in this segment would be discouraging for Alphabet's long-term prospects.


As is the case with Amazon, investors watching Apple's earnings release should also look for the tech giant's fiscal 2018 first-quarter revenue to be at the high end of management's guidance range.

iPhone X display being splashed in water

iPhone X. Image source: Apple.

Apple guided for first-quarter revenue to be between $84 billion and $87 billion, up from a record $78.4 billion in the year-ago quarter.

But investors will also likely watch Apple's guidance closely -- especially in light of rumors saying Apple slashed its orders with suppliers for iPhone X units. Currently, the consensus analyst estimate for Apple's second-quarter revenue is $67.1 billion, representing 26.8% year-over-year growth. Investors, therefore, may use this as a barometer for what to look for from the guidance management provides in its first-quarter earnings release.

All three of these companies will post their quarterly results after market close on Thursday. Investors can find their earnings releases on their investor relations websites.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$138.93 (1.62%) $2.21
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,174.75 (-0.21%) $-4.51, Inc. Stock Quote, Inc.
$109.56 (3.15%) $3.35
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,181.62 (-0.27%) $-5.83
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$160.03 (-0.76%) $-1.22
Microsoft Corporation Stock Quote
Microsoft Corporation
$259.58 (1.07%) $2.75
PayPal Holdings, Inc. Stock Quote
PayPal Holdings, Inc.
$71.40 (2.23%) $1.56

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.