Alphabet (GOOGL) will release its second-quarter earnings this week.
Google Weekly Chart
The price of GOOGL has not hit an all-time high like AAPL or MSFT. The price is also finding resistance at the 61.8% Fibonacci level, which will be a barrier in this earnings season.
Big tech earnings in the US start this week with Microsoft and Google.
Google and other firms will continue the trend of focusing on AI solutions and plans in their report. Analysts may look for its AI potential and its leadership in online search as it navigates slower enterprise spending on cloud services.
The advertising industry has tightened its belt in a tougher macroeconomic environment. Google co-founder Sergey Brin has now returned to the tech giant to help the company fight back against Microsoft ChatGPT-powered search. Google has maintained dominance in search, but Microsoft has narrowed the gap.
Google is expected to see its earnings rise 10.7% over the year to $1.34 per share, with revenues 4.4% higher at $72.8 billion.
“Heading into the second half of 2023, we see a much broader tech rally ahead as investors further digest the ramifications of this $800 billion AI spending wave on the horizon and what this means for the software, chip, hardware, and tech ecosystem over the next year,” Dan Ives said. “We believe overall the tech sector will be up another 12%–15% in the second half of this year, led by software and the chip sector, with Big Tech remaining the “torch bearer” for this tech rally continuing to heat up.”
The largest tech stocks “are going to need robust earnings to explain their sky-high valuations,” said Nigel Green at deVere Group. “In addition, they will need the guidance to indicate future quarters will be higher than anticipated for shareholders to receive additional gains. Should this not happen, we could see these stocks shed some of the advances.”
Stocks such as Microsoft have shown the potential for a near-term high after a soaring performance in the first half of 2023.
