By
Steve Muchoki
April 16th, 2024
It is now the season of S&P 500 big tech companies reporting their first-quarter earnings. By now, about 30% of them have reported results. Nearly 88% of reporting companies beat analysts’ expectations. However, only half of them saw their stocks rise after their reports.
US stock futures slackened on Tuesday, just overnight after being near record levels. S&P 500 futures rose by 0.05%, Nasdaq 100 futures gained 0.1%, and Dow futures lost about 60 points amid big tech companies announcing their earnings yesterday. Tech giants’ results that have been already released were quite impressive, but investors are cautious because of the high risk of a jump in inflation as well as the raging epidemic in India. Notably, Federal Reserve is preparing for the policy announcement regarding the first issue. Today, Federal Reserve Board Chair Jerome Powell will hold a press conference at 2:30 pm Eastern Standard Time, 30 minutes after the decision is announced.
S&P 500 Nears Record Level and Rolls Back amid Big Tech Earnings Season
On Tuesday, the Nasdaq Composite index dropped by 48.56 points, or 0.3%, to 14090.22. However, just a day before, it was at the record levels, ending at a record 14,138.78 and taking out its previous all-time closing high of 14,095.47 that it hit on February 12. The S&P 500 pulled back from record levels as well. In particular, it plunged by 0.9 point, or less than 0.1%, to 4186.72, from Monday’s closing high of 4,187.62. As of the Dow Jones Industrial Average, it closed up 3.36 points, or less than 0.1%, at 33984.93.
It is now the season of S&P 500 big tech companies reporting their first-quarter earnings. By now, about 30% of them have reported results. Nearly 88% of reporting companies beat analysts’ expectations. However, only half of them saw their stocks rise after their reports.
James Meyer, chief investment officer at Tower Bridge Advisors, stated:
“This week and next will provide the bulk of the remaining earnings. So far, results have far exceeded expectations. However, that hasn’t translated into a further surge in stock prices. That supports the notion that even though analysts underestimated the power of the recovery, investors did not.”
More details regarding big tech earnings are below.
Among those who reported their Q1 earnings, Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOGL), and Tesla Inc (NASDAQ: TSLA) proved to be the winners. Microsoft has seen tremendous growth across its professional and consumer businesses, with its revenue being the biggest since 2018 due to its cloud-computing services demand and video gaming sales surge.
Further, Alphabet blew Wall Street expectations with its Q1 revenue totalling$55.31 billion. The company generated huge profit from its Google Cloud service, YouTube ads, and Traffic Acquisition Costs (TAC).
Electric vehicle maker Tesla posted a record net income of $438 million. Besides, the company also reported a record $10.39 billion in revenue at earnings of 93 cents per share. Above all, Tesla sold 10% of its Bitcoin (BTC) taking out $272 million in net proceeds, which has led to speculation that Elon Musk has been involved in the classic pump and dump scheme of Bitcoin.
More companies will post their earnings today. Among them are Apple Inc (NASDAQ: AAPL), Facebook Inc (NASDAQ: FB), The Boeing Company (NYSE: BA), Ford Motor Company (NYSE: F), and more.