Tech Earnings: Winners & Losers


The busiest week in Big Tech earnings is over. Let’s take a quick look at some of the key takeaways. (AMZN) fared best among the most closely followed megacaps. Investors cheered North American retail trends and the the firm’s AWS cloud-services division. In addition they buzzed about the potential for a whole new line of revenue from advertising. Analysts see all these ingredients fattening margins over time.

Apple (AAPL) is also expected to benefit from stronger margins, although in this case investors are less sanguine about growth. One pundit even chided CEO Tim Cook for refusing to discuss how many customers the smart-phone maker is taking from Android.

Alphabet (GOOGL) fared worst among the biggest players, skidding 5 percent on the week after earnings missed and the Street echoed with worries about higher costs in the future.

Facebook (FB) stood out as a transformation story but did little in terms of share price. On the one hand, management conceded a clear slowdown in traffic. But like AMZN, investors see new roads to growth thanks to rising ad prices and development of services like Messenger.

The biggest surprise might have been eBay (EBAY), the once-boring online auction company. Sales volumes accelerated and executives surprised everyone by dropping a long-running collaboration with PayPal (PYPL). That, in turn, will create opportunities for new earnings from payments processing. PYPL took a beating on the breakup but EBAY’s heading into  Friday’s close with a 10 percent gain on the week.

Video-game maker Electronic Arts (EA) spiked doubled digits on a revenue beat. Analysts also increasingly highlight the potential for live events thanks to its partnership with the global soccer organization FIFA. That’s similar to the stories in FB and AMZN, with management teams seeking new ways to monetize large user bases. Is a new trend emerging for Tech in 2018?

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.