The tech net play kicks disconnected this coming week, with IBM, Netflix, Intel, Twitter, SAP, AT&T, Seagate, Texas Instruments, and Snap each owed to study June-quarter results. Expect spot crossed the tech landscape, but determination are sizeable transverse currents: Hardware and chips companies volition beryllium hampered by constituent shortages. Stay-at-home plays volition apt spot moderating growth. It should inactive beryllium a beardown 4th for handsets, unreality computing, online advertising, and e-commerce.
Here are 5 looming questions for the latest circular of tech earnings:
Is the PC roar over? Personal-computer request soared during the pandemic, arsenic the work-and-learn from location inclination took hold. Apple’s (ticker: AAPL) Mac income were up 70% past quarter; user PC income also soared astatine HP Inc. (HPQ) and Dell Technologies (DELL). But Gartner past week said worldwide second-quarter PC shipment maturation decelerated to 4.6%, from 35.7% successful the archetypal quarter, owed to terrible constituent shortages. Intel’s (INTC) results connected Thursday should supply clues connected PC demand.
How atrocious is the parts crunch? Taiwan Semiconductor (TSM) past week said that it volition ramp capableness for microcontrollers utilized successful car production. But arsenic Wireless Fund portfolio manager Paul Meeks notes, the quality triggered a crisp selloff successful some Microchip Technology (MCHP) and NXP Semiconductor (NXPI). “In immoderate cases, boosting proviso is simply a atrocious thing, peculiarly if their stocks had been beneficiaries—because higher prices had trumped less units shipped—of Covid-related proviso concatenation clogs,” Meeks says. David Readerman, portfolio manager of Endurance Capital, thinks Texas Instruments ’ (TXN) net study connected Wednesday should supply important clues astir request from industrial, automotive, electronics, and communications-equipment markets.
Will IT spending spike? Corporate data-center spending sagged successful 2020, arsenic companies unopen down, pinched pennies, and shifted their absorption to the cloud. But Gartner sees IT spending up 8.6% this year, versus past year’s 0.9%, arsenic the system reopens and workers instrumentality to offices. That should beryllium large for hardware companies similar Dell, Cisco Systems (CSCO), and Hewlett Packard Enterprise (HPE); disk-drive makers Seagate Technology (STX) and Western Digital (WDC); and enterprise-software players specified arsenic SAP (SAP) and Oracle (ORCL). IBM’s (IBM) results Monday volition beryllium an aboriginal work connected however the endeavor inclination is playing out.
Ready to deed the road? There are signs that much Americans are leaving the location for some enactment and pleasure, which is bully quality crossed online travel. Evercore ISI expert Mark Mahaney is bullish connected Uber Technologies (UBER), and helium thinks run-rate bookings successful the company’s mobility, oregon ride-sharing, concern could bushed Wall Street’s forecast. He says caller information connected hose passengers from the Transportation Security Administration “suggest a worldly recovery” is nether way. (Mahaney is keen connected Lyft [LYFT], too.)
Can thing dilatory the megacaps? I’m betting each 5 of the tech megacaps—Apple, Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), and Facebook (FB)—beat estimates. Together they are worthy $9.1 trillion. Evercore’s Mahaney thinks Amazon is “the strongest cardinal plus successful ’Net Land, trading successful enactment with its pre-Covid valuation contempt a strengthened outlook.” He’s besides bullish connected Facebook, based connected a continued betterment successful net advertising. The aforesaid origin should boost Alphabet. Wedbush expert Dan Ives likes Apple champion due to the fact that helium sees pent-up request for iPhones. As for Microsoft, each the trends—gaming, PCs, cloud, endeavor spending—are moving successful its favor.
Write to Eric J. Savitz astatine email@example.com