Wall Street Predicts: Which of Amazon, Apple, Microsoft Is the Top Earnings Pick?
Wall Street is closely monitoring the performance of key technology stocks as they approach upcoming earnings reports. Notably, three contenders from the “Magnificent 7” stocks—Amazon, Apple, and Microsoft—are being compared ahead of their quarterly financial disclosures. This analysis aims to identify the top earnings pick among these giants.
Upcoming Earnings Reports
Amazon (AMZN), Apple (AAPL), and Microsoft (MSFT) are set to reveal their financial results soon:
- Amazon: Scheduled for October 30, 2023.
- Apple: Scheduled for October 30, 2023.
- Microsoft: Scheduled for October 29, 2023.
Amazon (AMZN) Overview
Amazon’s stock has recorded a modest increase of 3.5% this year. Despite surpassing Q2 expectations, the company’s Q3 earnings guidance did not meet analyst forecasts, raising concerns about its investments in artificial intelligence (AI). Analysts predict a 10% growth in earnings per share (EPS) to $1.57 for Q3 2023, while revenue is anticipated to reach approximately $178 billion.
Investors are particularly interested in the performance of Amazon Web Services (AWS), which, despite benefiting from the AI boom, is growing at a slower pace compared to competitors like Microsoft Azure. Additionally, the company has announced plans to lay off up to 30,000 employees, indicating a significant restructuring effort.
Analyst Ratings for Amazon
KeyBanc analyst Justin Patterson has initiated a Buy rating on Amazon with a target price of $300. He highlights that Amazon’s advertising and grocery sectors could drive significant growth, while also pointing to a potential rebound in AWS. Overall, Amazon holds a Strong Buy consensus rating based on 41 unanimous Buys, with an average price target suggesting an 18.5% upside potential.
Apple (AAPL) Analysis
Apple’s stock has appreciated over 7% year to date. With the anticipated release of its fourth-quarter fiscal 2025 results on October 30, analysts expect an 8.5% year-over-year increase in EPS to $1.78 and a revenue rise of 7.5% to $102.2 billion. However, concerns regarding the U.S.-China trade dynamics and slower AI advancements compared to rivals persist.
Investors’ Sentiment on Apple
Wells Fargo analyst Aaron Rakers issued a Buy rating, increasing the price target from $245 to $290. Rakers believes Apple’s potential in AI and its robust services business will be key focuses for investors. The stock currently holds a Moderate Buy consensus rating based on 20 Buys and 12 Holds, with an average target suggesting a slight downside of 3%.
Microsoft (MSFT) Performance
Microsoft stands out with over a 26% increase in its stock this year. The company is set to report its first-quarter fiscal 2026 results on October 29, with expectations of an 11.2% growth in EPS to $3.67 and a 15% revenue increase to around $75.37 billion. Microsoft’s Azure cloud service is expected to leverage AI advancements significantly.
Outlook for Microsoft
TD Cowen analyst Derrick Wood reiterated a Buy rating on Microsoft, targeting a price of $640. He anticipates strong Azure growth, expecting a 37% rise in that segment. Microsoft’s stock currently has a Strong Buy consensus, with 33 unanimous Buys and an average target indicating an 18.3% upside potential.
Market Conclusion
As the earnings announcements approach, Wall Street shows strong confidence in Amazon and Microsoft, while maintaining a more cautious outlook on Apple. Investors will closely evaluate growth indicators in AWS and Azure services to determine the effectiveness of the significant investments made by these tech leaders.
