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♒ Most-hyped earnings of the week
Today's news sentiment=🟢 | We highlight this week's biggest upcoming earnings from Tesla, Microsoft, & friends...
This is MM. The daily market newsletter that squeezes the pulpy lemons of market news to make you this sweet, juicy, ~insight~ lemonade. 🍋
Most-hyped earnings of the week🔥
Earnings szn is heating up, and kinda like Vegas in July: it’s gonna be a hot one.
We decided to have some fun with it, so we took a lil tally of the most-talked-about earnings reports due out this week (based on total mentions in news).
Now, the results are in… this week’s most anticipated reports are:
#1 Tesla: the world’s favorite stock
| sentiment: 🔴 | report: Wednesday 1/25 after close
Tesla’s quarterly report is due out tomorrow after close, and to absolutely no one’s surprise, everyone is talking about it.
I mean c’mon — Tesla literally gets almost twice as much news coverage as any other stock on the market (source). It’s a big, volatile stock (up +33% YTD after ending 2022 -58%), and Elon is the most outspoken CEO on the planet; an easy conversation piece.
What is surprising is how mixed the expectations are for it’s Q4 report. Here’s the breakdown of what folks are looking at:
China: sales have been strong in China in 2022 (Tesla’s 2nd biggest market outside the US), but it’s also faced logistical problems & cooling demand as interest rates / recession fears rise.
Price cuts: to combat the headwinds, Tesla has lowered its prices in China & the US by nearly 20% in recent months, which has likely limited its auto revenues. It’s unclear just how limiting these cuts will have been.
Competition: on the other hand some see the price cuts as a strong signal to other automakers (ie. GM & Ford) that Tesla isn’t gonna play nice in the EV sandbox, calling it an ’offensive’ move that could spur demand by 12-15% in 2023.
Why it matters: whatever the sales numbers come out to be, Tesla’s Q4 report will set the tone for the entire auto market against a softening economic backdrop in 2023. If lower prices can broaden its appeal beyond the luxury car market, then to GM & Ford I say: good luck keepin’ up baby.
#2 Microsoft: job cuts, but there’s also OpenAI
| sentiment: 🟢 | report: Tuesday 1/24 after close
Another crowd favorite this week is big daddy Microsoft, with a Q4 report due out today after markets close. This one’s got a few major components…
Bad News
Along with the rest of big tech, Microsoft had a pretty tough 2022 on the market. In fact, last year was the first time since 2008 that Microsoft, Apple, Amazon and Google ALL ended the year lower AND all underperformed the S&P 500… oof.
These downturned stock prices are reflective of the slowing growth we’re seeing in the tech sector. And with the declining demand for Windows software & cloud computing in recent months, analysts are expecting Microsoft to report its slowest sales growth in more than 6 years.
The other negative indication here is that the company just announced plans to layoff 10,000 employees (~5% of its workforce) as part of a broader ‘cost-cutting’ effort.
Overall, the Q4 earnings story for Microsoft looks pretty mid. 🚬
Good News
HOWEVER, looking ahead, Microsoft just announced huge plans for a new multibillion-dollar investment into the beloved ChatGPT-maker, OpenAI.
And while this won’t be reflected in today’s quarterly report, the partnership paints a pretty picture of what’s ahead. The deets:
Big Deal: Microsoft and OpenAI agree to a 3rd phase of partnership (following Microsoft’s investments in 2019, 2021), with this one priced as high as $10B
Cloud Partnership: the deal will focus on supercomputing & research, and Microsoft’s Azure will serve as OpenAI’s exclusive cloud provider (a HUGE win for Microsoft)
Disrupting Search: Microsoft is reportedly preparing to launch a version of its Bing search engine that uses AI from ChatGPT to answer search queries. For me this is the biggest disruptor of all — a serious threat to Google’s 92% market share in the search engine space
All in all, while Microsoft’s quarterly prospects seem a bit bleak right now, the rest of big tech seems to be in a similar spot. Looking ahead, the OpenAI collaboration already seems like a HUGE deal. Google, if you’re reading this (I know you are):
You’ve been warned.
NEWS NUGGETS🥔
Top trending commentary parsed from news coverage
Bullish News Snippets
🟢 | 📰 Entrepreneur.com | 🗣️ buy-and-hold long term upside…
“With the market expected to rebound this year, fundamentally strong stock UPS might be solid buy-and-hold option for quality returns… UPS’s has an impressive earnings surprise history, surpassing the consensus EPS estimates in all the trailing four quarters.”
🟢 | 📰 MotleyFool | 🗣️ top dividend stock of 2023?
“Stanley Black & Decker stands out as my top Dividend King -- and dividend stock in general -- to buy in 2023 and hold for years to come… The company has done an excellent job maintaining sales growth and is currently generating all-time high sales even though profits have reverted to pre-pandemic levels.”
Bearish News Snippets
🔴 | 📰 MarketSentinel | 🗣️ falling price targets…
“Wall Street analysts have a consensus price target for FCX at $41.42, which means that the shares’ value could drop -7.03% from the levels at last check today.
🔴 | 📰 Zacks | 🗣️ downgraded to ‘Sell’ territory
“The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Twilio.”
Other Big Earnings This Week
🌑 | 📰 MarketWatch | 📆 reports earnings Thursday after close
“Opinion: The PC boom and bust is already ‘one for the record books,’ and it isn’t over. Intel CEO Pat Gelsinger, though, has a chance to lay out his vision for a long-term Intel rebound, as he attempts to make Intel a chip-manufacturing powerhouse again after years of struggles.”
🟢 | 📰 Investing.com | 📆 reports earnings Friday before open
“From a technical perspective, CVX stock is trading near the top of its 52-week range, but it is starting to show a base of support at around $177, which could be the catalyst for launching the stock higher.”
🔴 | 📰 Forbes | 📆 reports earnings Tuesday at open
“We expect HAL’s stock to trade lower due to revenues and earnings missing expectations marginally in its fourth quarter...It should be noted that shares of the company have surged about 43% in the past year, rising alongside much of the energy sector.”
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
SENTIMENT KEY: 🟢=bullish, 🌑=neutral, 🔴=bearish