The corporate earnings season is proving to be eventful and pivotal as more than 100 S&P 500 companies gear up to disclose their latest quarterly performances. This week marks a critical moment, with heavy hitters such as Alphabet, Amazon, and Advanced Micro Devices taking center stage. Early reports have set a vigorous tone: among the approximately 180 S&P 500 members that have revealed their fourth-quarter results so far, an impressive 77% have surpassed analyst expectations. This streak is particularly noteworthy when juxtaposed against the ten-year average beat rate of 75%, as highlighted by FactSet. Let us delve deeper into key anticipated reports and the overarching trends that emerge from this earnings season.
Starting the week on a high note, Palantir Technologies is set to announce its earnings post-market on Monday, accompanied by a management call at 5 p.m. The previous quarter saw Palantir’s stock soar by a staggering 20% due to a robust revenue forecast. Analysts now predict a remarkable 37% year-over-year increase in earnings. Given that Palantir’s stock has skyrocketed by 340% throughout 2024, the critical question revolves around whether the software firm can sustain this extraordinary momentum into 2025. Historical data from Bespoke Investment Group reveals that Palantir shares have rallied more than 10% in four out of the last five earnings announcements, making investor anticipation particularly strong.
On Tuesday, attention shifts to pharmaceutical giant Pfizer, which will report its earnings before the market opens with a management call scheduled for 10:30 a.m. Unlike the previous quarter, where Pfizer exceeded earnings expectations and lifted its full-year guidance, this time analyst forecasts suggest over 20% revenue growth compared to the previous year. Investors are keen on gaining insights into Pfizer’s drug pipeline, particularly its ongoing trials for several oncology treatments and a weight loss drug. Historically, Pfizer boasts an impressive earnings surprise rate, beating expectations 87% of the time, making it a stock to watch closely this week.
Moving on to Wednesday, Alphabet’s earnings report is highly anticipated, scheduled for post-market on Tuesday with a subsequent call at 4:30 p.m. Last quarter, Alphabet surpassed earnings due to a surge in cloud revenue. Analysts now forecast an almost 30% leap in earnings, largely fueled by the burgeoning artificial intelligence sector. Oppenheimer’s Jason Helfstein has expressed optimism, pointing out that similar growth trends are evident across other tech giants, like Meta Platforms. Alphabet has topped analyst expectations for a remarkable seven consecutive quarters, creating robust confidence among investors.
Advanced Micro Devices: Navigating Market Challenges
Later on Tuesday, Advanced Micro Devices (AMD) will reveal its earnings, following a less-than-stellar prior quarter that resulted in a stock price dip due to a lackluster forecast. However, this time, analysts predict an impressive 40% year-over-year growth in earnings. With AMD’s stock recently experiencing a decline, affected by competition and skepticism regarding the AI market, investor scrutiny is rife. Historical data indicates that AMD’s stock has grappled after earnings reports, falling in three out of the last four announcements.
Wednesday dawns with Disney’s earnings report anticipated before market opening, alongside a call at 8:30 a.m. Following a previous quarter that saw strong growth in streaming and solid guidance, the company is now expected to report meaningful growth, though revenue is projected to rise just 4%. Despite navigating a troubled media landscape, analyst David Karnovsky asserts that Disney remains uniquely positioned due to its compelling content and effective capital deployment strategy. The company has consistently beaten earnings estimates over the last six quarters, heightening investor hopes.
Also on Wednesday, Ford Motor Company will disclose its earnings post-market, with a management call at 5 p.m. After previously projecting disappointing guidance for 2024, analysts are keen to see if Ford can uphold the anticipated 20% year-over-year earnings growth. Barclays analyst Dan Levy has expressed caution, citing numerous headwinds the automaker faces. Despite a historical beat rate close to 70%, the stock has seen a modest average decline of 0.7% on earnings days, leaving many wondering whether it can reverse this trend.
The earnings week culminates with Amazon’s report on Thursday, scheduled post-market with a call at 5 p.m. Having outperformed expectations in the last quarter thanks to robust cloud expansion, this quarter’s projections indicate nearly 50% earnings growth year-over-year. Analysts, including Bank of America’s Justin Post, emphasize Amazon’s resilience in the AI-driven cloud sector and retail margin growth, boosting anticipation of yet another positive earnings surprise. Amazon, having beaten estimates for seven consecutive quarters, has established itself as a formidable player in the corporate earnings arena.
This week’s earnings season encapsulates a mix of exhilarating growth prospects and daunting challenges for major players. From software giants to automotive stalwarts, each company faces unique pressures that could shape market trajectories in the coming months. Investors and analysts alike will be watching closely as these quarterly reports unfold, seeking insights not just into earnings but also the broader economic narratives at play.