Meta, Amazon, Alphabet: Q3 2024 Earnings Reports

Quarterly earnings season is set to continue this week with a spate of reports expected with some of the biggest names in the tech industry. With Alphabet, Amazon, and Meta all scheduled to hold earnings calls in the coming days, the trading sessions ahead could be interesting. Let’s take a closer look:

Did Meta’s Bet on AI Pay Off?

Meta Platforms (META) is expected to release its third-quarter earnings results to the public on 30 October after the ring of the closing bell. Wall Street analysts seem to be upbeat regarding Wednesday's earnings call. Predictions are for Meta to report Q3 revenue of approximately $40.25 billion, an increase of nearly 18% year-over-year, alongside projected net income of $13.56 billion or $5.20 earnings per share, reflecting strong financial performance if borne out.

Meta’s advertising success has increasingly relied on AI innovations to optimise user engagement and ad relevance, boosting revenue across its core platforms, including Facebook, Instagram, and WhatsApp. Last July, CEO Mark Zuckerberg highlighted that Meta’s AI-driven advancements aim to make Meta AI the “most widely used assistant” by year-end. The recent release of Meta’s Llama 3.2 model underscores this ambition, possibly positioning Meta to compete with leaders like OpenAI and Google.

Some of the factors behind positive market sentiment toward the firm could be strong advertising growth, expanding app usage among younger demographics, and advances in AI capabilities. As investors await the earnings call, questions remain on how effectively Meta can balance its substantial investments in both AI and the metaverse to sustain the almost 62% share price growth observed so far in 2024. (Source: Investor's)

Mixed Expectations for Amazon

Amazon (AMZN) is set to announce its Q3 2024 financial results on 31 October, with key areas like Amazon Web Services (AWS) and high-margin services possibly to draw special attention from investors. The company has faced strong headwinds in its effort to maintain growth, especially following a mixed Q2 report where earnings per share performed well, but revenue slightly undershot targets, recording $148 billion against expectations of $148.8 billion. AWS, a significant revenue driver, reported a 19% year-over-year increase, underscoring its central role in bolstering Amazon’s bottom line.

For Q3, Amazon has projected revenue between $154 billion and $158 billion, aiming for approximately 9.5% growth, which falls just short of the double-digit growth many analysts had hoped for. Capital spending, especially on AI and the Project Kuiper satellite initiative, rose at an annualised rate of more than 50% in Q2, putting further scrutiny on how efficiently these investments contribute to the firm's bottom line.

Investor interest is also focused on Amazon’s advertising sector, where growth slowed slightly last quarter, raising concerns. Analysts predict a 21% earnings increase to $1.14 per share, with a 10% sales rise to $157.3 billion. With widespread market volatility ongoing, Amazon's Q3 earnings report will likely determine whether the 23% share price growth seen since the beginning of 2024 will continue.

Alphabet’s Steady Climb

Alphabet (GOOG), Google’s parent company, will release its Q3 2024 earnings after the market closes on Tuesday, 29 October, with expectations of solid revenue and profit growth. Analysts project that Alphabet’s revenue will rise over 12% year-over-year, reaching $86.41 billion, while net income is expected to increase to $23.03 billion, or $1.85 per share, up from $1.55 per share in Q3 2023.

Google Cloud, a key revenue driver, continues to grow substantially, with estimates suggesting a 29% year-over-year jump to $10.87 billion, following a 28% growth figure in Q2. However, Alphabet's investment in artificial intelligence has repeatedly raised concerns among investors, even as CEO Sundar Pichai underscored the long-term necessity of these investments.

New CFO Anat Ashkenazi, who joined in July of 2024, is also expected to provide insights on Alphabet’s financial priorities and potential new initiatives. Analysts are particularly interested in updates on Google Search and YouTube, especially in areas like AI-driven monetization and political ad spending, which could benefit Alphabet’s performance. With Alphabet shares up over 18% this year, the Q3 results will be closely watched by investors.

Conclusion

With the U.S. elections rapidly approaching, volatility could be the name of the game on markets around the globe for the near future. Now that several global tech leaders are joining the earnings release parade, how trading dynamics will develop in the days ahead is anyone’s guess.