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Peloton, Super Micro, AMD Set for Big Earnings Moves

Earnings peak with Apple, Amazon, McDonald's, and Pfizer set to report, amid 80% of S&P 500 companies beating expectations.

By Alex P. Chase

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4/29, 15:58 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
Apple Inc.
Advanced Micro Devices, Inc.
Amazon.com, Inc.
Alphabet Inc.
International Business Machines Corporation
Coca-Cola Company
McDonald's Corporation
Meta Platforms, Inc.
Microsoft Corporation
Pfizer, Inc.
Pinterest, Inc.
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Key Takeaway

  • Peloton leads with the highest expected post-earnings move at 21%, despite a 46% year-to-date stock decline.
  • Super Micro Computer and AMD could see significant swings, up to 12.6% and 7.4%, amid cooling chipmaker rally.
  • Pinterest's earnings could swing by 11.2%, with Goldman Sachs citing a stronger digital advertising environment.

Earnings Season Peaks

This week is a critical juncture in the earnings season, with a significant portion of the S&P 500 companies, including behemoths like Apple, Amazon, McDonald's, and Pfizer, poised to release their financial results. The anticipation is high, especially since over 200 S&P 500 members have already reported, with a remarkable 80% beating expectations. Despite this positive trend, notable tech firms such as Meta Platforms and IBM have encountered difficulties post-earnings, illustrating the sector's varied performance.

Key Reports to Watch

McDonald's Earnings Anticipation

McDonald's is on the cusp of reporting its earnings, with expectations set for single-digit growth in both earnings and revenue. Barclays analyst Jeffrey Bernstein has expressed optimism about the fast-food giant's potential for a rebound, despite its shares dipping over 7% year to date. Historical analysis by Bespoke Investment Group reveals McDonald's consistent outperformance in earnings, although its stock typically does not move significantly on earnings announcements.

Coca-Cola's Steady Performance

Coca-Cola is projected to maintain stable earnings and revenue year over year. The spotlight will be on organic sales growth, with JPMorgan's Andrea Teixeira predicting a 4.9% increase. Coca-Cola has a commendable history of surpassing analyst estimates, which could continue given its strong fundamentals and market position.

Amazon's Continued Momentum

Amazon has seen an 18% rally year to date and is expected to showcase substantial earnings per share growth. Analyst Joseph Feldman anticipates ongoing sales and profit growth, fueled by robust online spending and AWS's performance. Amazon's track record of exceeding earnings expectations and achieving significant gains on earnings days sets a high expectation for its forthcoming report.

Pfizer's Challenges and Opportunities

Pfizer is forecasted to face declines in both earnings and revenue, amid recent pressures on its stock. However, the company's recent FDA approvals and vaccine developments present opportunities for a turnaround. Historically, Pfizer has frequently beaten earnings expectations, though its stock performance on earnings days has shown variability.

Big Tech's AI and Cloud Computing Spotlight

The resurgence in Big Tech, driven by Microsoft and Alphabet's impressive earnings, has highlighted the importance of investments in artificial intelligence and cloud computing. Alphabet's milestone of reaching a $2 trillion valuation underscores the sector's growth potential. The upcoming earnings from Amazon and Apple will be crucial in gauging the market's continued enthusiasm for tech stocks. Amazon is poised to benefit from its AWS segment and online sales, while Apple faces challenges related to iPhone sales and its position in the AI market.

Street Views

  • Curtis Nagle, Bank of America (Bearish on Peloton Interactive):

    "Despite new initiatives such as launch of partnership with TikTok in Jan, we still remain cautious on subscriber growth which is yet to pick up. In our opinion, a return to sustained user growth (along with cost efficiencies and moving out debt maturities) would be required for a meaningful improvement in investor sentiment and share price."

  • JPMorgan Analyst Samik Chatterjee (Bullish on Super Micro Computer):

    "Super Micro is positioned with a strong product portfolio, which includes full rack scale solutions and liquid cooled systems, and a unique building block approach to product development that enables quick product refreshes amid the AI-led strong compute demand outlook."