Wall Street is bracing for a crucial Q4 earnings season in the tech sector, with analysts at Wedbush Securities keeping a close eye on three major issues: Apple Inc’s (NASDAQ:AAPL) resilience, enterprise spending, and cost-cutting measures.
Cloud data center spending is a major concern, with investors worried that a slowdown in 2023 will hit the likes of Microsoft Corporation (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), and Google, owned by Alphabet Inc (NASDAQ: GOOG).
However, the Wedbush analysts believe that enterprise cloud spending will soften, but not plummet as the market currently predicts.
The fate of Apple is also a hot topic. As the company releases its earnings on February 2, investors are keen to see if demand for the iPhone and other products and services can weather a potential recession. Wedbush analysts believe Apple’s products will be more resilient than the market anticipates.
Cost-cutting
Cost-cutting is also on the minds of investors, as companies like Salesforce and Amazon have recently announced headcount cuts.
The Wedbush analysts view this as a positive and predict another 5%-10% headcount cut across the tech sector as companies look to preserve margins in an uncertain macroeconomic climate.
In summary, the upcoming earnings season for the tech sector will provide insight into the economic outlook for 2023 and the resilience of tech companies. Investors should keep an eye on enterprise spending, Apple’s performance, and cost-cutting measures among big tech companies, the Wedbush analysts reiterated.