‘FAAMG’ Earnings Set to Impress, but Stretched Valuations Pose Big Risk Ahead
Wall Street’s fourth-quarter earnings season shifts into high gear in the coming weeks with some of the biggest names in the market set to release financial results.
With the S&P 500 and Nasdaq Composite hovering near their all-time highs, most of the focus will once again be on the ‘Big 5’ group of mega-cap companies.
Earnings from Alphabet (NASDAQ:GOOGL) (GOOG), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and Apple (NASDAQ:AAPL) will be significant considering these five stocks make up a substantial amount of both the S&P 500 and Nasdaq and have accounted for most of their gains over the past year.
As such, there will be a lot on the line when the so-called ‘FAAMG’ group of mega-cap companies report their respective results in the weeks ahead.
Google-parent Alphabet will be the first ‘FAAMG’ company to report earnings when it delivers its latest quarterly results after U.S. markets close on Tuesday, January 30, at 4:00PM ET.
Analysts have become increasingly bearish ahead of the print, according to an InvestingPro survey: of the 27 analysts surveyed, 17 downwardly revised their GOOGL earnings forecast, compared to ten upward revisions.
Source: InvestingPro
Consensus estimates call for Alphabet to report a profit of $1.60 per share for the fourth quarter, rising nearly 52% from EPS of $1.05 in the same quarter a year earlier, as the search giant continues to reap the benefits of ongoing cost-cutting measures.
Revenue is forecast to increase 12% from the year-ago period to about $85.2 billion, which if confirmed would mark the highest quarterly sales total in the company’s history.
The market will stay focused on growth rates at Alphabet's Google Cloud Platform, which saw sales jump 22%
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