Daily Brief - Tech titans tangle in earnings extravaganza

TLDR: It's a pivotal week on Wall Street, as five of the biggest names in tech - Apple, Amazon, Alphabet, Meta, and Microsoft - are poised to unveil their quarterly earnings.

The combined market value of over $10 trillion implies that the forthcoming results could greatly influence market trends, particularly in light of the S&P 500 reaching unprecedented highs.

Investors are keenly awaiting the earnings reports, with Microsoft and Alphabet drawing particular attention due to their substantial investments in the rapidly evolving artificial intelligence sector. Toggle has indicated that the projections for Alphabet might be overly conservative, historically leading to opportunities for positive surprises if these estimates are exceeded.

Meta Platforms, expected to release their report after the market closes on Thursday, February 1st, has seen its stock soar by 173% in the past year, propelled by reductions in costs and a resurgence in advertising revenue.

Amazon, also scheduled to report on February 1st, has experienced a 60% increase in its stock value over the past year. Toggle suggests that Amazon's current valuation might be appealing, hinting at a possible upward trend.

Apple, set to disclose its Q1 earnings on the same day, presents a more nuanced scenario. Despite a 35% rise in its stock over the past year, it confronts challenges in the premium market segment and potential pressures on iPhone sales.

With the recent market rally led by these tech giants, there's heightened anticipation around their performance. However, concerns linger about the market's overexposure to these few stocks. While traders seem confident, eschewing hedges against potential declines, there's an undercurrent of caution amid lofty valuations and crowded trades.

Market Movers: If Apple misses revenue expectations?

Here is the performance of Apple competitors on a median basis post historical revenue misses:

The top 3 performing stocks:

1. Ticker: SNE (Sony Group ADR), with a 1-month return of 2.95%
2. Ticker: DELL (Dell Technologies Inc), with a 1-month return of 2.74%
3. Ticker: SONO (Sonos), with a 1-month return of 1.21%

The bottom 3 performing stocks:

1. Ticker: SPOT (Spotify Technology ADR), with a 1-month return of -6.22%
2. Ticker: GRMN (Garmin), with a 1-month return of 0.18%
3. Ticker: HPQ (HP), with a 1-month return of 0.58%

Earnings Update: AMD reports tonight

For this quarter, analysts are forecasting AMD's revenue to grow by 9.6% year-over-year to $6.14 billion, marking a slowdown from the 16% year-over-year revenue increase recorded in the same quarter last year.

AMD anticipates year-over-year growth in its Data Center and Client segments by double-digit percentages. However, the Gaming segment is expected to decline due to the matured console cycle, and softness in the embedded market might negatively impact Embedded revenues.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.

Asset Spotlight: UBS volume 📉 JPM price 📈

Toggle examined 34 comparable instances in the past where volume in UBS stock reached a recent low. Historically, this has often been followed by a increase in the JPM's stock price over the next six months.

Despite a challenging economic environment, JPMorgan Chase has managed to continue to outperform and figures released this past quarter clearly illustrate that JPM is significantly ahead of its peers in the banking sector.