Big Tech stocks surge ahead of earnings tsunami

In this news, we discuss the Big Tech stocks surge ahead of earnings tsunami.

Apple, Facebook, Amazon and Alphabet came together on Thursday ahead of reports on the results of the quintet of tech titans that have helped keep Wall Street in positive territory this year, despite the coronavirus pandemic.

Facebook jumped more than 5%, with Apple and parent Google Alphabet each increasing more than 3%, and Amazon adding 1.6%. The earnings of these companies ahead of their quarterly results after the bell added a combined $ 163 billion to their market capitalization, more than the total value of McDonald’s Corp. and has outperformed its smaller competitors this year as the pandemic accelerates trends towards online shopping, video streaming and other technologies.

The rallies of stocks of these leading tech companies have driven the S&P 500 to record highs, even as the index’s smaller constituents struggle with a crippled global economy. Without Facebook, Apple, Amazon, Netflix and Alphabet – so-called FAANG stocks – the S&P 500 would be down about 4% in 2020, compared to the index’s 2% rise since the start of the year, according to a Bespoke Investment Group research note Thursday.

“Due to both the enormous weight of these stocks and their outperformance, the market has become more dependent on them for its gains than ever,” Bespoke said. This week’s quarterly reports come amid turmoil on Wall Street, with soaring coronavirus cases and uncertainty over a budget relief bill in Washington clouding the outlook for economic recovery and pushing down more than 5% the S&P 500 between Monday and Wednesday. The rally in tech stocks on Thursday pushed the S&P 500 up nearly 1%.

Microsoft, the third most valuable company on Wall Street, rose 1.1% after the software maker reported better-than-expected results Wednesday evening, helped by a shift to home and online learning online. due to a pandemic. Recent options trading imply that investors expect a 6.3% swing of Facebook shares in both directions by Friday, according to Trade Alert. Over the past eight quarters, on average, stocks have moved 5.5% the next day Facebook reported.

Facebook’s report could show the impact of several companies that have pulled out advertising in recent months to support a campaign calling on the social media giant not to do enough to stop hate speech on its platforms. Analysts expect on average Facebook to report revenue up 12% to $ 19.82 billion, according to Refinitiv. “If I look at all the large-cap tech companies, my main concern is Facebook, getting into the press, because of all these advertising boycotts, ”said Brad Gastwirth, chief technology strategist at Wedbush Securities.

News Highlights:

  • Apple, Facebook, Amazon and Alphabet came together on Thursday ahead of reports on the results of the quintet of tech titans that have helped keep Wall Street in positive territory this year, despite the coronavirus pandemic. Facebook jumped more than 5%, with Apple and parent Google Alphabet each increasing more than 3%, and Amazon adding 1.6%.
  • Large Tech stocks jump ahead of earnings tsunami
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