Technology

Earnings Previews: Alphabet, AMD, Microsoft, Texas Instruments

A quick glance at the calendar for this week shows some 900 publicly traded companies are scheduled to report March quarter earnings this week. We’ve selected a couple of dozen to preview over the next few days from the nearly endless list.

First out of the chute this week (Monday afternoon) is Tesla, then General Electric and UPS are scheduled to report results before markets open Tuesday. All three will be watched closely.


This report covers four technology companies scheduled to report earnings after markets close on Tuesday. We’ll have a second story later on four other companies that will report either late Tuesday or first thing Wednesday morning.

Alphabet

In the fourth quarter of 2020, Alphabet Inc. (NASDAQ: GOOGL) posted revenue of nearly $57 billion, a year-over-year increase of more than 23%. All but about $4 billion of that came from Google Services, and $46 billion of that was down to search advertising. Cloud revenues improved by around 45% to $3.8 billion in the fourth quarter. Those numbers will have to continue to grow, perhaps at an even faster pace, if Google is going to meet analysts’ estimates.

Most analysts don’t think that growth is going to be a problem for Google. All but five of 43 analysts rate the stock a Buy or Strong Buy, and the rest advocate holding the shares. The consensus price target on the stock is $2,415.30, implying potential upside of around 4.7% at a current price of $2,306.60. At the high target of $3,000 per share, the upside potential is around 30%.

The consensus estimate for first-quarter earnings per share (EPS) is $15.70, up 59% compared with the year-ago quarter. Revenue is forecast to total $51.55 billion, up more than 25% year over year. For the full fiscal year, analysts are looking for EPS of $69.70 on sales of $227.16 billion.

At the current price, the stock trades at 33.5 times expected 2021 EPS, 28.5 times estimated 2022 EPS and 24.9 times estimated 2023 EPS. The stock’s 52-week trading range is $1,230.38 to $2,308.04, and the high was posted Monday morning. Alphabet does not pay a dividend.

AMD

Although Advanced Micro Devices Inc. (NASDAQ: AMD) doubled its share price in 2020, the stock is down nearly 10% in 2021. To some degree, AMD was a prime beneficiary of Intel’s 2020 woes, and it still is. Even after Intel beat estimates last week, the company’s share price fell by about 5% and AMD’s price rose by more than 4%. Oddly enough, Intel’s year-to-date share price gain is nearly 20% compared to AMD’s 10% share-price decline.

The consensus seems to be that Intel is on its way to sorting out its problems and AMD is going to feel the pain. Why analysts believe Intel will finally get 7nm production right after so long getting it wrong is something of a mystery.

Analysts have mixed feelings about AMD. Fifteen of 31 analysts have a Hold rating on the stock, and 11 have Buy or Strong Buy ratings. The consensus price target on the shares is $102.40, implying an upside potential of 23.5% to a current price of around $82.90. At the high target of $161.90, the upside potential is a whopping 95%.