Solid Big Tech earnings expected despite politics
SAN FRANCISCO: A powerhouse line-up of earnings releases is expected to show that giants of Big Tech are on firm financial footing despite turbulent politics and the Coronavirus Disease 2019 (Covid-19) pandemic.
Amazon, Apple, Facebook, Twitter and Google-parent Alphabet are all slated to disclose how their businesses faired in the third quarter of this year.
“The reality is that the strong are getting stronger with FAANG names such as Amazon, Facebook, Google, and Apple beneficiaries of the current environment,” Wedbush analyst Dan Ives said in a note to investors.
Robust financial results expected from the tech behemoths will highlight their “outsized” strength, and put a “bright spotlight” on them in regard to antitrust concerns, Ives added.
Alphabet and Facebook dominate the digital ad market, which appeared to be recovering from a hit it took early in the pandemic, according to analysts.
And while much smaller in terms of making money, Twitter is likely to have seen advertising benefit in the quarter as people tune in for US election commentary and live sports that were held despite pandemic concerns.
Facebook likely saw its ranks of users and its revenue grow in the quarter, even despite an ad boycott calling for more meaningful curbs on hateful content, Canaccord Genuity said in a note to investors.
Alphabet was also expected to see ad revenue growth return, with help from streaming video platform YouTube.
Despite criticisms of online platforms, advertisers seem to prefer proven online venues such as Facebook and Google when it comes to spending marketing money, according to Canaccord.
Investors will be interested in Google’s cloud business, as well as a recent expansion of its pioneering driverless ride service.
Waymo, the autonomous car unit at Alphabet, opened its robo-taxi project to the general public in the US city of Phoenix in September.
While not likely to be a moneymaker yet, Waymo promises to be a rare Alphabet “moonshot” that actually becomes a viable stand-alone business.
Meanwhile, Google and Amazon are rivals in a fastgrowing cloud computing market, which has seen demand boom as people work, learn, shop and socialize online due to the pandemic.
Both companies are expected to showcase how their cloud businesses are thriving. Amazon’s e-commerce revenue engine likely continued to rev as people avoiding real-world stores go online for groceries, clothes, business supplies and more.
Analysts will be keen to know how Amazon’s recent Prime Day sales went, even though the event took place after the end of the third quarter, as well as whether the company’s delivery operations were getting back up to speed despite the heavy load.
Apple is expected to meet earnings expectations with help of a thriving business selling digital content and services to fans of its mobile devices.
“Apple should post at least modest upside to the Street’s US$64 billion top-line estimate on the heels of stronger Services revenue and relatively healthy iPhone demand,” Ives said. — AFP