Though recently the market's attention was mostly drawn to trade tensions and the consequent risk asset declines, with gold standing out as a safe-haven asset, now all eyes are on the earnings reports. Those already released have led to stock drops and surges, and the upcoming reports are yet to decide the fate of major players.
Among the giants who have already released the reports are Netflix, Intel, Johnson & Johnson, and others, including dozens of S&P 500 companies.
For Netflix, the values reported exceeded market expectations, with earnings per share of $0.56 and revenue of $12.05 billion. However, though the figures were above projections, the stock price declined after the release. This may be linked to the increase in in-house content production expenses and the pause in the share buyback ahead of the expected Warner Bros.
For Intel, the situation was somewhat similar. The company reported EPS of $0.15 and revenue of $13.7 billion, both higher than the anticipated values of $0.08 and $13.4 billion, respectively. However, after the report's release, the stock price dropped sharply, as the company's projected Q1 results fell short of market expectations due to supply constraints. This outlook raised concerns among investors.
Johnson & Johnson, in turn, reported figures mostly in line, slightly beating the estimations: EPS of $2.46 and revenue of $24.6 billion. The stock price slipped after the release, though it began to recover the following day.
This week will also see a number of reports, with companies such as Tesla and Meta releasing their figures. For the Magnificent 7 group, the values are expected to be roughly 16% higher than last year.
According to Wall Street analysts, Tesla's earnings per share are projected at $0.45, down from the year-ago level, and revenue is expected to be $24-25 billion. Apart from the overall values, the market will also scrutinize figures for AI and robotics projects, which have a great impact on future development, according to Tesla’s CEO, Elon Musk. The company’s position is currently shaky, as Tesla has faced intensified competition in China and seen sales decline in Europe last year. The report released on Wednesday may significantly impact Tesla stock performance.
For Meta, analysts expect revenue of $56-59 billion and EPS of roughly $8.15-8.20. The main driver of growth is expected to be ad promotion, given the company's prominent position in this market. However, even if these figures outperform estimates, sentiment may not be particularly positive, as investors cautiously approach the company’s planned AI project expenses.
Overall, the period of report releases is a significant market phase closely watched by market participants and widely anticipated. The figures may boost the stock's performance or lead to a sharp drop, as seen.
This article was written in cooperation with TradingView