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Earnings Estimates For Technology Stocks Rise Ahead Of Reports

Google stock and Facebook stock are among a number of tech giants that have seen their earnings estimates steadily hiked by research firm FactSet for the September quarter. Meanwhile, Amazon stock is a laggard, FactSet says.

Since June 30, the third-quarter earnings estimate for Google-parent Alphabet (GOOGL) has improved to $23.72 per share from $20.15, said a FactSet report. At $23.72, Google stock profit would soar nearly 45% from the year-ago quarter vs. the earlier estimate for 23% growth.

Meanwhile, since June 30 the estimate for Facebook (FB) has climbed to $3.17 per share from $2.95.

For Netflix stock, which reports third-quarter earnings on Oct. 19, estimates have advanced to $2.57 per share from $2.20.

Apple stock and Microsoft stock also are among tech companies with sizable increases. Third-quarter earnings estimates for Apple (AAPL) have advanced to $1.23 per share from $1.11 on June 30. For Microsoft (MSFT), earnings estimates are now $2.07 per share, up from $1.95.

Amazon (AMZN), though, has underperformed after delivering June-quarter earnings that missed estimates — as did its third-quarter outlook. The profit estimate for Amazon stock has tumbled to $8.90 per share from $12.89 on June 30, said FactSet.

Big Quarter Projected For S&P 500

For the September quarter, the S&P 500 could notch its third-highest year-over-year growth in earnings since the third quarter of 2010, said FactSet. The S&P 500 is expected to report earnings growth of 27.6%, up from an estimated 24.2% on June 30.

The energy, materials, industrials and information-technology sectors are expected to report the highest growth. The unusually high growth rate is largely tied to the coronavirus pandemic’s impact on Q3 earnings in 2020.

However, while this year’s period could be a strong quarter, 2022 guidance will be key.

“The main focus will be around guidance (which has started to soften), and we believe 2022 EPS will be revised lower,” said a Bank of America report published Oct. 12.

Google Stock Relative Strength Line Steady

The relative strength line of GOOGL stock has remained steady heading into the company’s third-quarter earnings report on Oct. 26. The relative strength lines of Facebook and Amazon, however, have weakened as their third-quarter earnings reports approach.

GOOGL stock has popped 57% in 2021, though institutional support has weakened. Facebook stock is up 19% this year. Amazon stock is about even.

Apple stock has gained 6% while Netflix (NFLX) stock is up 16%.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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