Yahoo Finance Live anchors Seana Smith and Dave Briggs look ahead to the tech stock earnings due out next week.
Video Transcript
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DAVE BRIGGS: All right, next week, I’m watching earnings from some big tech companies. On Tuesday, we get second quarter earnings from Microsoft. Wednesday, we get Q4 reports from Tesla and IBM. And on Thursday, Intel reports its fourth quarter results. So let’s go through them one at a time and start with Microsoft. What jumps out to you?
Sean Smith: Yeah, Dave, it’s going to be an interesting quarter here for Microsoft. We know the company just announced 10,000 job cuts. I’m sure the Street will want to hear a little bit more from Satya Nadella just in terms of those cuts, what he thinks that’s going to mean for the company here going forward. Revenue growth is expected to be the slowest pace that we have seen in about six years.
Also, the company got its first sell rating in more than three years this week. So the Street kind of took a second look at Microsoft over the past year. We’re looking at a one-year chart right now. The stock off just about 20%. So Microsoft, I think a lot of the emphasis is going to be on the earnings call and what we hear from executives there.
DAVE BRIGGS: And you know all eyes are on ChatGPT. Interesting to have a conversation earlier about this in terms of you saw Larry Page and Sergey Brin come back, according to the “New York Times,” because of the threat that ChatGPT poses to the AI business over there at Alphabet. And we still haven’t seen how they’re going to monetize ChatGPT. But the theory is, it poses a real threat to Google’s search business. Many don’t buy that because they don’t think there’s a realistic challenge from Bing. I happened to agree with that. I think the monetization is going to come elsewhere. And those practical use applications are, quite frankly, endless. All right, to Tesla.
Sean Smith: Your Tesla. Tesla, I think a lot of it’s going to be on the call as well. We know that delivery number missed estimates when it– coming into fourth quarter. That was a huge disappointment for the Street. The price cuts, I think we’re going to want to hear a lot more about that, what it has done for demand. It’s only been, what, about a week or so far, but what they think it could do for demand going forward. And then, of course, on the negative side, the pressure might be on margins. But again, Tesla is still off about 60% in the last year.
DAVE BRIGGS: And margins we won’t really know. They’re probably not going to tell us, and it’s more of a Q1 story for the next report. Now, also on Tesla, Elon Musk took the stand today in California. This is all related to that 2018 tweet claiming that he had lined up the financing to take Tesla private. And Alexis Keenan reporting that he did say this on the stand, “Difficult to say that the stock price is linked to the tweet.”
Asked whether he’s aware that Tesla’s stock price sometimes goes up or down following his posts, Musk rejected the idea that his tweets could be directly correlated to the stock’s behavior. Really? I think he’s well aware of the impact his tweets have on stock’s behavior.
Sean Smith: I think so too.
DAVE BRIGGS: Not just his own. Look at what he’s done with Dogecoin and others.
Sean Smith: Yeah, I think so too. And it will be interesting more of the headlines that come out of that today. Also, Intel is going to be an important one to watch. We talk about the slowdown. And we have certainly seen in the chip sector, that has been reflected in shares, off nearly 30% in the last six months. Some of that contraction, though, in the industry, I think, is expected to pressure the top line here for Intel.
Bank of America saying that their estimates, they think it’s going to drop about 9%, well below the consensus of a 3% drop. Weaker performance here being flagged by management. But I don’t know how much of that has already been priced into the stock. Certainly, some of that rebound might be further out than we had anticipated. Maybe second half of 2023 is a safer bet.
DAVE BRIGGS: Pat Gelsinger in Davos telling CNN, “Where the technology supply chains are and where semiconductors are built is the most important question for the next five decades.” He said it’s more important than even oil reserves for the future. So a massive statement on the future for the space from Pat Gelsinger.