Before the season started, Wall Street expected fourth-quarter 2023 earnings per share to rise about 1.2%. Earnings per share grew 7.7% through Friday, when about 93% of companies reported.
When it comes to technology, investors are still sold on the idea that the biggest companies are both a haven and a growth asset. Large companies have strong balance sheets and cash flows that help them weather macroeconomic uncertainty and rising interest rates. Cost discipline is also key, with Meta earlier this month announcing a $50 billion ($76.7 billion) share buyback and its first dividend, before its share price soared.
“That was a drop of the microphone. When a company can buy back $50 billion worth of stock, that’s crazy,” Mahoney said.
This is helped by signs that Nvidia and others continue to dominate the AI field. Last week’s stunning earnings report lifted the broader market, while also showing the company’s earnings are growing faster than its stock price, with Thursday seeing the largest single-session market value increase ever. .
Amazon was also praised by the market for reporting strong momentum in its cloud business and providing an operating profit outlook that beat Wall Street expectations. “Aside from Nvidia, this is our expectation for top performers,” said Nancy Tengler, chief investment officer at Laffer Tengler Investments.
Of course, not all of these seven great stocks beat earnings estimates, nor did their stock prices rise immediately after the news.
tesla miss
Apple shares came under pressure after earnings showed slowing demand in China, but have since recovered. Alphabet’s report also gave investors reason to pause, showing search ad revenue fell short of analysts’ expectations.
Tesla reported quarterly results that missed Wall Street expectations and warned that growth is expected to be weaker this year, weighing on a stock already under pressure. The recession has reduced Tesla’s market value by about $155 billion this year, making it one of the worst-performing companies in the South American market.&500 pesos.
However, not everyone takes that into account. Tengler said her team bought more Tesla stock, which was trading around $180 a share earlier this year.
Although concerns about the macroeconomic backdrop and the potential for earnings growth remain, there are some signs that the market’s rally, which has been concentrated in top technology stocks, will widen as investors’ risk appetite increases.
“There’s a growing trend and I think you’ll see that continue throughout this year,” Tengler said. “But that doesn’t mean this great seven can’t continue to perform.”
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