Tech firms are set to report their Q3 earnings this week, with analysts largely expecting strong EPS and revenue growth.

Freepik

Several big tech firms are set to post their Q3 earnings results this week, including Microsoft (MSFT), Amazon (AMZN), Google (GOOGL), and Meta Platforms (META). All big tech firms witnessed strong growth in the previous quarter amid the ongoing AI frenzy, and analysts largely expect this momentum to expand in the third quarter. 

Expectations Going into Big Tech Q3 Earnings this Week

Earlier this month, the Q3 earnings season began with Wall Street banks stealing the spotlight by surpassing analysts’ expectations. As we shift our focus to this week, it’s now the turn of Big Tech as some of the world’s largest companies prepare to unveil their Q3 results. Notably, Microsoft, Alphabet, Meta, and Amazon stand out. 

After making heavy investments into OpenAI’s ChatGPT earlier in the year, Microsoft is expected to expand its momentum built in the previous quarters. Analysts expect the windows maker to post year-over-year revenue growth of 8.8% to $54.5 billion, while EPS is forecasted to rise by 12.6% to $2.65 

Like Microsoft, Google’s parent company, Alphabet, is also projected to accelerate revenue to low double-digits in the coming quarters. For Q3, Wall Street estimates the tech behemoth to generate $75.7 billion in revenue, which would mark a 9.6% year-over-year growth. Meanwhile, EPS is estimated to increase by 36% YoY to $1.44.

In line with the broader sector, e-commerce and cloud computing giant Amazon also garnered positive investor and analyst sentiment ahead of its Thursday report. After registering 10.9% YoY revenue growth in Q2, analysts projected Amazon’s revenue to surge by 11.4% in the third quarter, while EPS is expected to rocket by 114% to $0.6. 

After returning to positive growth in Q1 this year, Meta Platforms took the stock market by storm. The Facebook owner is anticipated to see YoY revenue growth of more than 20% in both Q3 and Q4, while analysts’ estimates for EPS sit at $3.58. 

Can the Magnificent Seven Expand their Momentum?

The upcoming Q3 reports come on the back of a strong year for the Big Tech sector.

After a dismal 2022 marked by record-high inflation and rising interest rates, tech companies staged an impressive rebound this year, driven mainly by the generative AI boom. All three aforementioned companies recorded double-digit stock price increases year-to-date, with Microsoft at 36.3%, Alphabet at 52.1%, Amazon at 45.8%, and Meta at 147.4%. 

These tech titans and Tesla, Nvidia, and Apple make up the Magnificent Seven. This group of stocks accounted for most of the S&P 500’s gains. Over 50% of the index’s returns came from the Magnificent Seven, indicating a significantly concentrated market. 

More By This Author: