Investors were reminded of something this week when the tech earnings came in: it’s a stock-picking market right now. In other words, companies that perform well are rewarded by investors, while those who aren’t posting good results are getting hit. This means that investors need to do their homework and choose correctly.
The recent earnings reports revealed several examples of this trend. Meta’s stock price experienced a significant rise after the earnings showed that the House of Zuck is coming back to life. In contrast, Snap showed none of it, and a stock price disaster followed. PepsiCo’s earnings were more impressive than Coca-Cola’s, and its actions were rewarded accordingly. Amazon signaled weakness in its cloud services in April, and investors dumped the stock.
This trend is expected to continue next week too as companies continue to report earnings. Apple’s earnings call is coming up on May 4th, and investors are eagerly looking forward to it.
This week’s earnings call produced a mixed bag of results. Amazon announced that AWS net sales grew 11 percent in April, marking a slowdown from 16 percent in the first quarter. On the other hand, Snap called for a 6 percent year-over-year revenue decline for the second quarter, while Meta was geared towards sales growth of around 7% in the second quarter. Furthermore, Meta ended the first quarter with 77,100 employees, which is down by 11% quarter over quarter.
Additionally, Bed Bath & Beyond’s stock is scheduled to be delisted on May 3 after filing for bankruptcy. Meanwhile, Tesla’s shares have fallen 16% in the past month on post-earnings profit margin concerns.
The earnings call vibes varied from bullish to bearish across companies. Amazon’s CFO Brian Olsavsky expressed concerns regarding the cautious spending behavior of customers amid an uncertain economic environment and ongoing inflationary pressures. Meta’s CEO Mark Zuckerberg talked about a third round of restructuring and layoffs in their commercial groups, while McDonald’s CEO Chris Kempczinski discussed the acceptance of prices and a decrease in units per transaction.
As investors navigate this stock-picking market, analysts have provided valuable insights and charts. For instance, Jefferies technology analyst Brent Thill created a chart showing expected low sales for Snap.
As per information from the source, “investors need to be cautious and choose wisely in this stock-picking market.” While there are bright spots like Meta and PepsiCo, there are potential pitfalls like Snap and Amazon. Therefore, research and analysis are necessary while investing in the current market.