It is going to be a busy stretch for corporate earnings. According to Credit Suisse analysts, there are 316 companies representing nearly three-fifths of the S&P 500’s market capitalization set to report over the next two weeks. Included in the bunch are Advanced Micro Devices (AMD, $123.08), Alphabet (GOOGL, $2,754.31), Twitter (TWTR, $61.91), Amazon.com (AMZN, $3,328.86) and Apple (AAPL, $148.98).
“Earnings are coming in better than expected so far,” says Savita Subramanian, equity and quant strategist for BofA Securities. “Companies are facing increased cost pressure, but higher sales and operating leverage outweighed cost headwinds.”
While the bulk of earnings beats so far have been from the financial and energy sectors, tech companies – which take up a lot of space on this week’s earnings calendar – have been reporting higher margins, she adds.
Advanced Micro Devices Stock Stages Pre-Earnings Rally
Advanced Micro Devices has been climbing higher since skimming the $100-per-share mark in late-September/early October, with shares of the chipmaker now trading in all-time high territory.
Susquehanna Financial Group analyst Christopher Rolland sees even higher highs ahead for AMD stock, as evidenced by his $130 price target. He also has a Positive (Buy) rating on the shares ahead of the company’s third-quarter earnings report, due out after Tuesday’s close.
“Overall, we expect AMD to once again meet/exceed both third-quarter results and fourth-quarter guidance,” he says. “A constructive personal computer environment, strong underlying trends, record-high ASPs and well-executed roadmaps have worked in favor of AMD.”
And while Advanced Micro Devices surrendered modest GPU market share to Nvidia in Q3, “an overall elevated GPU demand environment and recent strength in the cryptocurrency markets should act as offsets to the share loss,” he adds.
Overall, analysts are projecting consensus third-quarter earnings of 67 cents per share, +63.4% year-over-year (YoY), and revenues of $4.1 billion – 13.9% higher than AMD’s year-ago results.
Analysts Upbeat Ahead of Alphabet Earnings
Analysts are anticipating solid year-over-year growth for Alphabet. On the top line, the consensus estimate is for $63.3 billion, up 37.1% from Q3 2020. This will fuel an 18.9% improvement in earnings per share (EPS) to $19.50.
Baird analysts Colin Sebastian and Dalton Kern expect to see strength in YouTube advertising and the adoption of the Google Cloud Platform. They have an Outperform rating on the internet search giant, which is the equivalent of a Buy.
Over at Credit Suisse, analysts believe Google’s rollout of free product listings on its shopping tab – which they call a “top-of-funnel move to onboard more merchants” – as well as recently expanded checkout options will increase Q3 conversion rates. They also have an Outperform rating on GOOGL.</…….