Stock Market Futures Gain On Strong Tech Earnings
U.S. stock futures are trading mostly in the green this morning. This appears to be the case even as investors continue to digest the wild movement in stocks throughout January. With more earnings from Big Tech rolling in this week, quarterly reports would be on most investors’ minds now. Even so, Michael Vogelzang, chief investment officer over at CAPTRUST, recently provided a cautious update on the market. He argues, “We had a pretty rough January. I think we’re seeing a little bit of short covering and some bouncing here off the bottom. I don’t think the market’s settled yet.“
Vogelzang continues, “We don’t quite know yet what the Fed’s going to be doing. We don’t have a good sense of the path of inflation for the rest of the year.” Moreover, he also highlights the possibility of rising tensions between Russia and Ukraine weighing in on oil prices as well. All of which could, in theory, serve to slow down the current economic recovery while driving inflation higher. With this alongside a growing number of job openings and quits in the U.S. labor market would be alarming for some. Safe to say, investors appear to have no shortage of stock market news to consider today. As of 6:42 a.m. ET, the Dow, S&P 500 and Nasdaq futures are trading higher by 0.10%, 0.71%, 1.43% respectively.
Alphabet (GOOGL) Stock Soaring On Earnings Beat & 20-For-1 Split Announcement
Google parent Alphabet (NASDAQ: GOOGL) reported better than expected fourth-quarter earnings after the closing bell Tuesday. As a result, GOOGL stock is trading 10% higher in pre-market trading today. If these gains hold through today’s session, it would put Alphabet in contention for a $2 trillion market cap. Diving into the latest quarterly report, the tech giant reported $30.69 earnings per share (EPS) on revenue of $75.33 billion. Wall Street expected EPS of $27.34 on revenue of $72.17 billion, according to Refinitiv. The strong quarter was made possible with the ongoing strong growth in the company’s advertising business. In brief, Google’s advertising business revenue came in 33% higher to $61.24 billion for the quarter.
“We see Alphabet as one of the best-positioned companies in the digital ad sector, with exposure to some of tech’s most important secular trends through mobile search, YouTube and enterprise cloud computing … We expect Cloud to become a more central component of the thesis over time (as the business scales and margins improve) and expect Google to continue capturing market growth from the ongoing shift towards digital advertising.”- David Wagner, portfolio manager and equity analyst at Aptus Capital Advisors
What’s more, the company also said its board approved plans for a 20-for-1 stock split. This will essentially lower its price from about $3,000 to $150 and will be able to bring shares to the masses. Nevertheless, investors need to know that stock splitting does not increase the fundamental value of the company. However, from the stock splits we’ve seen with Tesla (NASDAQ: TSLA) and Apple (NASDAQ: AAPL), it appears that people like to chase stock splits. All in all, Alphabet is proving again that it was able to withstand pressures from the pandemic and inflation.
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AMD Stock Surges On Solid Q4 Earnings And Upbeat 2022 Outlook
Another tech name turning heads with its latest earnings release would be Advanced Micro Devices (NASDAQ: AMD). After Tuesday’s closing bell, AMD posted stellar figures across the board in its fourth-quarter financial update. Diving in, the chipmaker posted earnings of $0.92 a share on revenue of $4.83 billion for the quarter. Notably, this would be well above Wall Street’s estimates of $0.76 and $4.53 billion respectively. Not to mention, the company posted record highs in terms of both quarterly and annual revenue. Compared to the previous fiscal year, AMD’s annual revenue surged by 68%.
Commenting on the company’s latest performance is CEO Dr Lisa Su. She notes, “Each of our businesses performed extremely well, with data center revenue doubling year-over-year driven by the growing adoption of AMD EPYC processors across cloud and enterprise customers.” According to AMD, this growth is particularly evident in its Computing & Graphics and Enterprise, Embedded & Semi-Custom (EES) segments. In particular, the company’s EES segment saw its revenue skyrocket 75% year-over-year, totaling $2.2 billion. As a result of all this, AMD stock surged by over 10% during after-hours trading yesterday.
On top of all that, AMD also appears to be confident in its ability to perform going into 2022 as well. For the current fiscal year, AMD is expecting sales of about $21.5 billion. This would mark a 31% year-over-year increase while crushing analyst estimates of $19.26 billion. Accordingly, with AMD’s current momentum, investors will likely be tuning in to AMD stock in the stock market today.
Ford Looking To Boost EV Spending Plans By As Much As $20 Billion
Elsewhere, Ford (NYSE: F) appears to be kicking into high gear on the electric vehicle (EV) front. Namely, the automotive giant is doubling down on its previous plans to electrify its portfolio. According to sources from Bloomberg, Ford is planning to increase its EV investments by an additional $10 billion to $20 billion. The report suggests that this will occur through the current decade. In detail, these funds will be going towards converting conventional gas vehicle factories to EV production facilities.
Now, it is also important to note that all this is on top of Ford’s current EV plans. For those uninitiated, Ford is already looking to invest a whopping $30 billion towards its EVs through 2025. This would be excluding the ongoing $11.4 billion EV plant construction deal with South Korea’s SK Innovation group. In the larger scheme of things, it seems that the company is focusing on pushing its current Ford+ strategy as highlighted by CEO Jim Farley last year. For one thing, this move would make sense as the world continues to shift its attention towards EVs. Despite the current report being speculation, F stock could be worth keeping an eye on in the stock market now.
At the same time, consumers already appear to be keen on the company’s upcoming EV, the Ford F-150 Lightning. So much so that as of last month, Ford is expecting to double production capacity for the electric pickup truck. According to the company, this move is in response to Ford receiving almost 200,000 reservations at the time. With attention from both consumers and investors alike, some would argue that Ford is on a roll now.
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Notable Earnings To Watch In The Stock Market Today
Not to mention, there are plenty of massive companies reporting their earnings today as well. This ranges from some of the biggest names in pharmaceuticals, industrials and technology. In the pre-market hours, we have Abbvie (NYSE: ABBV), D R Horton (NYSE: DHI), Thermo Fisher Scientific (NYSE: TMO) and Dynatrace (NYSE: DT) on tap.
Alternatively, for those looking towards earnings after the closing bell, there is a strong focus on tech. After the strong earnings from Alphabet and Advanced Micro Devices, Meta Platforms (NASDAQ: FB), Qualcomm (NASDAQ: QCOM), Spotify (NYSE: SPOT) and T-Mobile (NASDAQ: TMUS) will be the key focus among investors today. Whether it is digesting the latest earnings or corporate news, investors have plenty to consider in the stock market today.
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