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MongiIG

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  1. MongiIG
    Alphabet’s share price has surged more than 17% year-to-date. Can the positive momentum continue in light of upcoming Q1 results?
    Source: Bloomberg  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 19 April 2023  When does Alphabet report earnings?
    Alphabet Inc is set to release its quarter one (Q1) financial results on 25 April 2023, after market closes.
    Alphabet’s earnings – what to expect
    Current expectations from Refinitiv are for Alphabet’s upcoming Q1 revenue to come in at $68.8 billion, up 1.2% year-on-year. Earnings per share (EPS) is expected to come in at $1.07, a 13.1% decline from a year ago.
    Advertising environment remains tough but signs of resilience will be on watch
    78% of Alphabet’s top line comes from Google advertising revenue, so development on that front will continue to drive the numbers for its upcoming results. Given the cyclical nature of the advertising market, there is little doubt that the uncertain economic outlook will lead corporates to continue tightening their belts and pull back on advertising spending, weighing on Alphabet’s key revenue generator as a result.
    However, with the downbeat environment being a given, signs of resilience will be what market participants are looking for. Current expectations are for a 1.7% decline in advertising revenue from the previous year. Considering that 1Q 2023 brought about a more restrictive interest rate environment and unexpected instabilities in the global banking space, one may argue that a mere 1.7% contraction can be a remarkable feat and meeting expectations may provide a source of relief.
    Furthermore, 1Q 2023 saw the US economic surprise index revert back into positive territory to deliver its highest reading since April 2022. A still-robust US labour market may play a part and the positive reading suggests that economic conditions could still be holding up above expectations, at least for 1Q 2023. This may raise the odds of potential resilience being reflected in the upcoming results. Alphabet derives almost half of its revenue from the US.
    Source: Refinitiv Hopes for its cloud division to cushion lower advertising revenue
    All eyes will also be on Alphabet’s cloud division to provide some cushion against the lower advertising revenue and will be key in helping the company eke out a positive top line growth for the upcoming results.
    Expectations are for a further slowdown in the segment’s growth, but nevertheless, still showing a strong double-digit increase from a year ago (expected 28.7% versus 32.0% in Q4 2022). While corporates are more cautious with their spending now, digital transformation in business processes is still expected to remain the priority to maintain longer-term competitiveness. With that, signs of resilience in cloud adoption will be on the lookout.
    According to Refinitiv, for the past four straight quarters, Alphabet has failed to deliver up to expectations for both its top and bottom line. Therefore, meeting or exceeding estimates this time round may provide a much-needed positive surprise.
    ChatGPT – Will Alphabet’s search-engine dominance slip?
    With the recent hype around ChatGPT, Google has been deemed to be on the backfoot in integrating AI capabilities for its search features. Previous launch of its own version of AI Chatbot, Bard, has created an uproar about its misinformation. Therefore, focus will also be on how its management will convince investors in staying competitive to avoid losing market share.
    For now, Alphabet remains the dominant player in the search engine market with more than 80% market share, but it will be a race against time to defend its share of the pie with intense competition. Any guidance on the progress of its Bard integration will be on close watch.
    To add to more uncertainties, Samsung is also reportedly considering making Microsoft Bing the default search engine on its Galaxy phones, instead of Google. While it could be a move from Samsung to squeeze more billions from Google ahead of its deal renewal, this will be an issue which needs to be addressed by the management as well.
    Technical analysis – Rising channel pattern in focus
    From its technicals, Alphabet’s share price has been largely trading within a rising channel pattern since November last year. The series of higher highs and higher lows still keep an upward trend in place, while its share price successfully defended the key 200-day moving average (MA) lately.
    That said, recent retests of the upper channel trendline were met with some resistance, with declining Moving Average Convergence/Divergence (MACD) on recent price highs suggesting some moderation in upward momentum for now. Greater conviction may come from an upward break of the US$110 level to pave the way towards the US$117 level next. On the downside, its 200-day MA remains a key trendline to watch and holding the line may still keep its prevailing upward trend intact.
    Source: IG charts
  2. MongiIG
    Amazon (NASDAQ:AMZN) reported Thursday softer third-quarter revenue guidance and mixed second-quarter results as earnings beat, but revenue fell short of expectations.
    Amazon.com announced earnings per share of $15.12 on revenue of $113.1 billion. Analysts polled by Investing.com anticipated EPS of $12.24 on revenue of $115.33 billion.
    Net sales in North America rose to $67.55 billion from $55.44 billion in the the prior-year period.
    Amazon Web Services, its fast-growing cloud revenue segment, grew revenue to $14.81 billion from $10.81 billion.
    Looking ahead to Q3, Amazon guided sales between $106 billion and $112 billion, representing growth of 10% to 16% compared to the same period last year, missing analysts estimates for third-quarter revenue of $119.02 billion.
    Operating income is expected to be between $2.5 billion and $6.0 billion, compared with $6.2 billion in third quarter 2020.
    By Yasin Ebrahim, 30 July 2021. Investing.com
  3. MongiIG
    As Amazon gears up to release its Q1 2024 earnings on April 30, market watchers are eyeing potential growth in AI technology, cost-cutting measures, AWS expansion, and advertising revenues.
     

    Written by: Tony Sycamore | Market Analyst, Australia   Publication date: Tuesday 23 April 2024 05:45 When will Amazon report its latest earnings?
    Amazon is expected to report its first quarter (Q1) 2024 earnings after the market closes on Tuesday, 30 April, 2024.
    Amazon: a titan among the Magnificent Seven
    Amazon is an American multinational technology company specialising in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It is a member of the so-called "Magnificent Seven", along with Tesla, Microsoft, NVIDIA, Apple, Meta, and Alphabet.
    In its Q4 2023 earnings report, Amazon surpassed Wall Street's expectations, resulting in its share price surging 8% higher in after-hours trading. The company reported revenues of $170 billion in the fourth quarter, 14% higher than the $149.2 billion reported in the fourth quarter of 2022. The company reported EPS of $1.00 per share, beating market forecasts of $0.80, significantly exceeding reported EPS of $0.03 in the fourth quarter a year earlier.
    "This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon," said Andy Jassy, Amazon CEO. "As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about."
    Amazon projects robust sales growth and profitability in Q1 2024 guidance
      Source: Amazon
    Amazon's key financials
    Slowing revenues
    Current Quarter (Q1 2024): $142.53 billion Previous Quarter (Q4 2023): $170.00 billion EPS takes a dip
    Diluted EPS Q1 2024: $0.83 Diluted EPS Q4 2023: $1.00 Amazon sales revenue
      Source: TradingEconomics
    Andy Jassy's vision for Amazon: what to watch for?
    Amazon embraces the AI revolution
    Jassy mentioned AI and Gen AI more than 30 times in his letter to shareholders earlier this month, noting that "Generative AI may be the largest technology transformation since the cloud – which itself is still in the early stages – and perhaps since the internet." As such, there will be keen interest in seeing how Amazon continues integrating and utilising AI technology within its business and product offerings and the potential it can create for shareholders.
    Jassy's cost-cutting crusade
    After overspending during the pandemic, Jassy is expected to continue cutting costs, specifically in the fulfilment and logistics division. "As we look toward 2024 (and beyond), we're not done lowering our cost to serve. We've challenged every closely held belief in our fulfilment network, and re-evaluated every part of it and found several areas where we believe we can lower costs even further while also delivering faster for customers."
    Riding the AI wave: AWS's growth trajectory
    Last quarter, revenue for the AWS segment increased by 13% year-on-year. There will be keen interest in seeing that rate of growth maintained in this AI-heavy area of Amazon as more businesses shift their data storage to the cloud.
    Prime video and sports: the advertising goldmine
    Amazon's Advertising revenue increased by 24% year over year in 2023 to $47 billion from $38 billion in 2022. Shareholders will look for continued strong growth in this area powered by various measures, including incorporating advertisements into Prime Video Shows and Movies and live sports.
    The rise and fall of Amazon's cashier-less dream
    Amazon's cashier-less technology, designed to help shoppers skip the line, was intended to reshape the future of retail. However, shoppers appeared uncomfortable using the technology. While Amazon has announced that they are walking back the technology, there will be interest in seeing what plans the company has for the technology already developed.
    Amazon's 2023 letter to shareholders
      Source: Amazon
    Amazon technical analysis
    In a move that took almost three years to complete, Amazon's share price recently reached a new all-time high after dropping more than 55% from its July 2021 high of $188.65. Amazon's ascent to new highs was driven by an 18% increase in the share price during the first quarter of 2024 - a performance that exceeded the tech-heavy Nasdaq, which saw a more modest 8.50% rise during the same timeframe.
    Amazon weekly chart
      Source: TradingView
    The daily chart below illustrates that after an 8% jump in early February (following its Q4 2023 earnings report), Amazon's share price recently surged to new highs, propelled by a bullish trend channel. Looking ahead, bullish trend channel resistance lies at around $192, which would be a logical spot for profit-taking type sell orders. On the downside, initial support is identified at $170, where we would expect dip buyers to step in, ahead of more significant support at the lower boundary of the trend channel, coming in at around $148.00.
    Amazon daily chart
      Source: TradingView
     
    Source TradingView. The figures stated are as of 17 April 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.              
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  4. MongiIG
    Amazon is poised to reveal its Q4 2023 earnings on February 2nd, 2024. Anticipated to showcase a robust increase in EPS and strong sales growth, the report is eagerly awaited by investors.
    Source: Bloomberg   Shares Amazon Amazon Web Services E-commerce Cloud computing Revenue
    Written by: Hebe Chen | Market Analyst, Melbourne | Publication date: Wednesday 31 January 2024 05:02 Amazon earnings date:
    The tech giant is scheduled to disclose its Q4 2023 earnings on 2 February at 8.00am AEDT, following the US market closure.
    Amazon Q4 expectations and key observations
    The anticipated earnings report for the upcoming quarter indicates a substantial improvement in earnings per share (EPS), projected to be $0.79. This represents a significant increase from the corresponding quarter in 2022, where the EPS was only $0.12 per share.
    Regarding revenue, Amazon's Q4 guidance from the previous earnings report suggests that net sales are expected to range between $160.0 billion and $167.0 billion. This indicates a growth rate of 7% to 12% compared to the fourth quarter of 2022, marking a double-digit increase from the preceding quarter.
    Furthermore, the forecast for operating income is estimated to be between $7.0 billion and $11.0 billion, a notable rise from the $2.7 billion reported in the fourth quarter of 2022.
    FY24 Q2 expectations
    Source: Amazon AWS and online advertising
    Focusing on key business segments, Amazon's premier cloud service, AWS, is forecasted to continue its robust growth trajectory. AWS's sales are expected to increase by 15% year-over-year in Q4, slightly higher than the 12% growth observed in the prior period, while maintaining a remarkable operating margin above 30%. Despite facing stiff competition from Microsoft’s Azure and Google Cloud, Amazon's dominance in cloud services has been reinforced by the surge in AI, with existing customers launching generative AI workloads on AWS.
    Another area under scrutiny in the upcoming report is Amazon's online advertising venture. This sector reported revenues of $12.06 billion in Q3, a 26% increase year-over-year. With Q4 encompassing the peak holiday shopping season, an influx of shoppers to Amazon's e-commerce platform is likely, further bolstering its retail and advertising revenues.
    Analyst ratings and future projections
    In 2023, Amazon's stock significantly outperformed the S&P 500, achieving a remarkable 63% annual gain and affirming its status among the top performers of the 'Magnificent Seven' club. Emerging from the turmoil of 2022, the retail behemoth has impressed investors with its solid growth and optimistic future prospects. Not surprisingly, based on the IG platform’s TipRanks rating, Amazon boasts a smart score of 9 out of 10.
    Consensus among all 37 analysts surveyed in the last three months has been unanimous, with Amazon rated as a 'buy.'
    Analyst ratings
    Source: IG Technical analysis
    From a technical perspective, Amazon’s stock prices are advancing towards the early 2022 peak, with the $160 mark posing as a significant barrier and test ahead of the earnings announcement.
    Looking at the long-term trend, the stock's price trajectory remains strong. Particularly, the reversal of the head-and-shoulders pattern suggests potential for further gains once the pattern’s neckline, also around the $160 mark, is breached.
    In the short term, immediate support is identified at $155, with any further downturn potentially bringing the 20-day SMA into focus.
    Amazon weekly chart
    Source: Tradingview Amazon daily chart
    Source: Tradingview
       
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  5. MongiIG
    Amazon shares fell by 13% from $2,904 to $2,540 in after-hours trading last night as it announced its first loss since 2015.
    Source: Bloomberg   Shares Amazon Amazon Web Services Satellite Starlink Kuiper Systems  Charles Archer | Financial Writer, London | Publication date: Friday 29 April 2022  Amazon's (NASDAQ: AMZN) share price fall has sent shives down the spines of every NASDAQ investor hoping for a rapid tech stock recovery.
    But is now a buying opportunity, or could further falls be imminent?
    Amazon share price: Q1 2022 factors
    1) Headline growth
    Revenue increased by only 7% year-over-year to $116.4 billion. By contrast, Amazon’s revenue exploded by 44% to $108.5 billion in the same quarter last year. And it slumped to its first loss in seven years, losing $3.8 billion compared to its $8.1 billion profit of Q1 2021.
    Moreover, Amazon only expects revenue to grow by 3-7% to between $116 and $121 billion in Q2. And operating income is expected to come in between a $1 billion loss and $3 billion gain, compared to its $7.7 billion gain of Q2 2021.
    However, some perspective is important. Amazon’s full-year net sales rose by 22% to $469.8 billion in 2021. Growth at this pace during supply chain disruption, amid low consumer confidence and a full-blown cost-of-living crisis, may be unrealistic in 2022.
    CEO Andy Jassy, who recently announced a $10 billion share buyback scheme, may simply be steering the ship through choppy waters before attempting to increase growth further.
    2) Amazon Web Services
    Amazon’s emerald is its Amazon Web Services (AWS) cloud computing division. Jassy highlighted that ‘with AWS growing 34% annually over the last two years, and 37% year-over-year in the first quarter, AWS has been integral in helping companies weather the pandemic and move more of their workloads into the cloud.’
    Finbold data shows that AWS is the cloud computing market leader, with 33% of the global market share. Microsoft's Azure and Google's Cloud trail behind at 21% and 10% respectively.
    Grand View Research predicts the global cloud computing market will be worth over $1.5 trillion by 2030. With clients from Boeing to Bundesliga, AWS could power Amazon’s revenue growth for years to come, if it can maintain market share.
    Source: Bloomberg 3) Stock split
    Its first since 1999, Amazon is planning a 20-for-1 stock split that could mark a new phase for the company’s strategy.
    Whole shares will become more affordable to the masses, which will drive up cash for investment whilst monetary policy tightens. In addition, the move could drive up its flagging market cap, as Amazon’s share price has fallen by 31% since mid-November to $2,540 at the time of writing.
    It could also see the stock enter the exclusive hall of the Dow Jones, gaining passive investor interest and blue-chip prestige in the process.
    4) Unionization
    This month, Amazon workers in Staten Island in New York became the first to vote for unionization in the United States. A second vote at another New York facility is being counted next week, and the results could send a ripple effect through Amazon’s 1 million-strong workforce.
    It’s worth noting that inflation in the US is even higher than in the UK at 8.5%, and US workers enjoy far fewer labour rights than their UK counterparts.
    However, Jassy believes Amazon is ‘no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.’ He could be pushing back against the power imbalance caused by the labour shortage.
    And Amazon noted that it ranks first in the US on LinkedIn’s annual Top Companies list for career growth, as well as second in Fortune’s list of World’s Most Admired Companies.
    5) Expansionary efforts
    Amazon has come a long way from its origins as an online bookseller. But not every innovation has worked. Its near 20% stake in EV upstart Rivian is key to this quarter’s loss, as Amazon lost $7.6 billion from Rivian’s share price collapse.
    But Amazon is also active in the streaming space. Upcoming Lord of the Rings and Thursday Night Football projects are certain to increase subscriber numbers. And its Alexa and Ring smart home devices continue to sell.
    Then there are the emerging businesses. Amazon’s Care virtual health service is now available 24/7 throughout the US, with in-person expansion ongoing in key cities.
    But Project Kuiper, Amazon’s ‘initiative to increase global broadband access using a constellation of satellites in low Earth orbit’ is arguably more exciting. In association with Arianespace, Blue Origin, and United Launch Alliance, Amazon has secured 83 launches, sufficient to launch 3,236 satellites into space.
    This comprises ‘the largest commercial procurement of launch vehicles in history,’ and puts Amazon into direct competition with SpaceX’s Starlink network for the 21st-century space race.
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  6. MongiIG
    Amazon looks to have keeled over and may drop to the $2950.5 to $2873.5 major support area.
    Source: Bloomberg  | Writer, | Publication date: Thursday 20 January 2022  The drop in the Amazon share price is very much entrenched and a large double top formation will technically be confirmed once a weekly close below the August low at $3170.6 has occurred.
    This may well be happening on this Friday’s close, having already been tested but held last week. At present the May 2021 low at $3117.5 represents key support, a fall through which would not only make the confirmation of the double top formation much more likely but also lead to the next lower major support zone being pushed to the fore. It consists of the July, September and November 2020- as well as the March 2021 lows and comes in at $2950.5 to $2873.5.
    Should the large double top formation be triggered this week, its downside target would come in at $2569. It can be obtained by taking the distance from the July high to the August low and by projecting it lower from the latter.
    The Amazon share price has been evolving in a clearly marked downtrend channel since November of last year and is likely to continue to slide within it over the coming weeks, even if a minor bounce is witnessed over the next few days due to key support being tested at present.
    Only an unexpected bullish reversal and rise above the 55-week moving average and last week’s high at $3336.1 to $3333.9 should lead investors to re-evaluate their bearish views.
    Source: ProRealTime
  7. MongiIG
    The Amazon stock split will dilute the value of each share by a factor of 20, without affecting the e-commerce giant's inherent value. Its new CEO, the Dow Jones, and renewed share price momentum all factor.
    Source: Bloomberg   Indices Shares Amazon Stock Stock split Share price  Charles Archer | Financial Writer, London | Publication date: Monday 14 March 2022  The Amazon (NASDAQ: AMZN) share price is going to fall by 95% on 6 June 2022.
    However, unlike Meta, Netflix, Peloton and dozens of other big tech stocks, Amazon’s share price fall is a pre-meditated action taken for the benefit of shareholders. Joining Apple, Tesla, Nvidia and Alphabet, it’s announced a 20-for-1 stock split; its first since the pre-historic days of 1999.
    To be clear, if the stock split were happening today, an investor who owned one Amazon share at the current price of $2,910 would find themselves with 20 shares worth $145.50 each.
    Accordingly, the stock split will not fundamentally change the value of the stock or the business that underlies it. However, here are three potential reasons why the Amazon stock split is happening now.
    1) Amazon’s fresh CEO
    Founder and former CEO Jeff Bezos had previously stressed the importance of long-term strategy over short-term financials, famously refusing to partake in quarterly earnings calls.
    But new CEO Andy Jassy may be a different breed of excecutive. Like Bezos, he has also chosen to stay away from quarterly earnings calls. But he’s also shied away from the press, and largely stayed off social media.
    In addition to the stock split, Amazon announced a new $10 billion share buyback, its first since a $5 billion repurchase scheme in 2016, of which only $2.12 billion was used. It could be that Jassy, now comfortable in his new role, has been appointed as custodian for the next stage of Amazon’s life cycle.
    Amazon saw full-year net sales rise 22% to $469.8 billion in 2021. But the world is changing. Already the largest e-commerce outfit in the world, Amazon would have to increase sales by $103.4 billion to grow sales another 22% in 2022. And it will be contending with global supply chain disruption worsened by the Ukraine crisis, as well as soaring inflation, interest rates and personal debt in its key markets.
    Jassy could be moving Amazon into a consolidation stage while the world’s economy reboots. Stock splits, share buybacks, potentially even dividends could convert Amazon into a defensive stock while global markets reconfigure.
    This marks a significant policy divergence from previous CEO and current Chairman Bezos.
    2) Amazon share price momentum
    Alphabet, Tesla, Apple, and Nvidia are far from their share price highs, but they are all up significantly since their stock splits. Meanwhile, Amazon’s share price is worth what it was in July 2020. And after sliding from $3,696 since 18 November to $2,910 today, pressure on the new CEO to arrest the slide remains intense.
    And psychologically, retail investors and employees may be more likely to purchase the stock if they can buy multiple whole shares, rather than part-purchasing. In Amazon’s own words, the split provides ‘more flexibility in how (employees) manage their equity in Amazon and make the share price more accessible for people looking to invest in the company’.
    Wedbush analyst Dan Ives believes ‘even though they (stock splits) doesn’t change the valuation, from an individual investor perspective, (the high price) would make the stock less appealing.’
    3) Primed for Dow Jones inclusion
    Amazon’s stock split could see it join the prestigious Dow Jones Industrial Average index; as the index is price-weighted, Amazon’s current share price would carry too much influence. But after the stock split, it would then meet the eligibility criteria. The last company to join the Dow was Apple in March 2015, nine months after it completed a 7-for-1 stock split.
    DataTrek co-founder Nicholas Colas argues that while Amazon’s management are unlikely to care about inclusion in the Dow Jones ‘from a purely financial perspective,’ they ‘perhaps’ care from ‘the perspective of corporate recognition.’
    And potentially, as monetary policy tightens, more investors will seek the safety of the Dow Jones’ ultra-blue-chip offerings.
    Moreover, Deutsche Bank analyst Lee Horowitz recently released a bullish note on the company’s prospects. Horowitz believes Amazon’s retail sales will grow by 25% this year, double the Refinitiv average analyst estimate, driven by ‘ongoing share gains in the massive grocery market…ranked as the top grocer amongst consumers.’ And he highlighted its AWS Web Services division’s ‘$80 billon in gross backlog additions,’ which could drive revenue from $62 billion in 2021 to $83 billion in 2022, and towards $107 billion in 2023.
    The Amazon stock split is investor-friendly, and fellow tech stocks have found success in the strategy. But past success is no future guarantee. The Amazon share price may not dance to Jassy’s tune.
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  8. MongiIG
    Advanced Micro Devices is expected to report its earnings on November 1st after the market closes.
      Source: Bloomberg
      Shares Advanced Micro Devices Price Nvidia Revenue Lisa Su Hebe Chen | Market Analyst, Melbourne | Publication date: Friday 28 October 2022  When will AMD report its Q3 earnings?
    Advanced Micro Devices is expected to report its earnings on November 1, 2022, after the market closes. The report will be for the fiscal Quarter covering July and September.
    What to expect?
    According to Zacks Investment Research, the EPS forecast for the quarter sits at $0.72, a 31% decline from the previous quarter and a 4% down from the same quarter last year. Revenue is expected to grow to $5.69 billion, 13% down from Q2 but up 32% year-over-year (y-o-y).
      Source: Nasdaq
    What to watch for
    Preliminary third quarter 2022 financial results
    On October 6th, AMD released a preview for its third-quarter earnings allowing investors to get a glimpse of how the chipmaker had performed.
      Source: AMD
    On a positive note, AMD expects data centres to grow by 45% and gaming by 14%.
    These two sectors contribute over 40% of AMD’s total revenue.
    As stated by AMD’s CEO Lisa Su in a recent press release, "The PC market weakened significantly in the quarter."
    On the other hand, heightened pressure is coming from its client segment. AMD's client products consist of consumer PC processors and GPUs currently experiencing a broad downtrend. Therefore, it’s anticipated that AMD’s client segment will post a 40% y-o-y revenue decline in the third quarter and further down in the quarters ahead.
    Outlook and concerns
    Going forward, the perspective that potential enormous growth will stem from the data centre segment. While competing against Amazon, the good news is that AMD has demonstrated strong momentum in this area.
    The Q2 net revenue from the data centre soared by 83% from a year ago, with great potential to overtake the gaming segment as the second largest contributor.
    Despite of the unprecedented headwind, the company is expecting to post an increase of 29% y-o-y.
    That is to say, the chip maker remains on track for solid growth.
      Source: AMD
    While the long-term picture for AMD looks solid, its near-term story is far from perfect.
    AMD produces much lower profit margins than its peers. For example, AMD’s net profit margin for Q2 was 14.51%, substantially lower than NVIDIA’s net profit margin of 26.03%.
    As profitability is a critical quality that investors carefully check, it will ultimately impact the company's value. Hence, we can see from the third Quarter that the PE ratio for AMD is only 17x versus Nvidia’s 34x.
    AMD share price
    AMD stock is down 60% year-to-date as investors back away from fast-growing semiconductor stocks in the face of inflation. The US government’s chip ban on Russia and China is one of the latest examples of an accelerated decline over the past two months.
    From a technical viewpoint, the stock price for AMD is attempting to break through the 20-day moving average while the RSI is leaping from oversold territory. In the case that the earnings manage to satisfy its investors, we should be able to see the price surge to face the key hurdle at $71, which used to be a massive support.
    On the other hand, the price may retest $59 if AMD misses the expectation. Bear in mind that the broader trend remains bearish.
       
    Source: IG
  9. MongiIG

    AMD Q1 2022 results: what to expect?

    By MongiIG,


    Market News
    Advanced Micro Devices, the world’s leading chip maker is scheduled to report its first-quarter earnings on May 3rd after market close.
    Source: Bloomberg Hebe Chen | Market Analyst, Australia | Publication date: Thursday 28 April 2022  When is the report date?
    Advanced Micro Devices, the world’s leading chip maker, is scheduled to report its first-quarter earnings on May 3rd after market close.
    What to expect?
    The consensus EPS forecast for the quarter is $0.84, a 78% lift from the same quarter last year at $0.47 but lower than previous quarter’s $0.92 per share. In the previous earnings, AMD said it expected $21.5 billion in sales in 2022, a 31% increase over 2021′s sales, including $5 billion in sales in the first quarter.
    Source: Nasdaq Source: Nasdaq What will be the key watch point?
    For the past two years, AMD has been riding on a surge in PC and electronics sales due to the pandemic lockdown and the trend of working from home. As a result, its full-year growth for 2021 has concluded at a jaw-dropping 68% revenue growth rate and an enviable 48% margin.
    However, as we have seen from the other covid-boosted companies like Zoom and Netflix, the start of 2022 has staged a new era of post-pandemic economy, which may introduce various headwinds for the business. A shrinking demand, a heightened cost pressure, and supply chain issues are causing real pains.
    In the IT industry, Microsoft has cut its revenue forecast by 10% as recently reported citing the hurdled operating levels in China. Therefore, investors would be keen to get an update on AMD's view as back in September, AMD predicted that the worldwide chip shortage would be eased in 2022.
    In terms of the business units, AMD has recently released new chips with significant performance gains that empower the company to challenge its biggest competitor, Intel. In addition, AMD’s CEO Dr Lisa Su confirmed that AMD would be launching the next generation of PC, gaming and data centre products in 2022. Hence, the progress of these new products will be crucial to watch for the upcoming report.
    Technical Analysis
    Like other tech stocks, AMD did not enjoy a good start to the year as its price has been heavily discounted since early January. Currently sitting at around the band of $86 to $90, more than 40% lower than the peak. The long-term trend for the AMD share price remains downward as the weekly candlestick has broken through key support since 2020, which could potentially see the stock keep moving toward the low in May 2021, nearing $74.
    For the near term, the RSI in both the weekly and daily chart has dived to the floor level that hasn’t been seen for more than two months, a suggestion that the buyer may consider a bargain on this level. Imminent support can be found at $80. While a close above flag resistance at $95.17 would open the sky to the level of $100. Only on a breakthrough of trend line support (as shown in both daily and weekly charts) should we expect a reversal to bull-biased to trades on the stock.
    Source: TradingView Source: TradingView Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.
  10. MongiIG
    AMD’s share price has surged close to 9.5% over the past week. Can its upcoming Q3 results lead to a new record high for its share price?
    Source: Bloomberg  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 20 October 2021  When does AMD report earnings?
    Advanced Micro Devices (AMD) is set to release its Q3 financial results on 26 October, after market closes. Expectations for its Q3 earnings per share (EPS) to come in at US$0.67, up 63.4% year-on-year and 6.3% from the previous quarter.
    AMD earnings – What to expect
    AMD’s sales and earnings growth continue to ride on strong demand across all its products in the likes of consoles, PCs (CPUs and GPUs) and server CPUs. The demand momentum is expected to be mirrored in the upcoming Q3 results as well. This has been reflected in the upward revision of its 2021 annual revenue to an approximate 60% growth year-over-year, from the original 50%, during the previous earnings guidance.
    Overall gross margin has also been on an upward trajectory since Q3 2020, highlighting its product pricing power such as its 7-nanometre-based processors, which continues to provide a competitive edge against peers like Intel. This comes amid an ongoing digital shift towards hyperscale data centres, whereby data centres have been and may continue to expand its share of AMD’s revenue mix. The management has previously revealed a longer-term target of having gross profit margin greater than 50%, which suggests that the uptick in margins may last for quarters to come.
     
    Source: AMD
    With that, the tailwinds supporting its growth for the quarter may continue to revolve around the upgrading process of server CPUs from its second-generation ‘Rome’ to its latest third-generation ‘Milan’. The acquisition of Xilinx has also received some regulatory approval, such as in EU and UK, with the successful closing of the deal potentially bringing about some cost synergies amid the overlap of shared infrastructure.
    As AMD delivered a record amount of free cashflow in Q2, it has repurchased 3.2 million shares for US$256 million in the second quarter. This seems to fuel some optimism that strength in cash generation revealed in subsequent quarters may lead to further share buybacks, thereby driving greater shareholder returns. The upcoming results will be watched for validation.
     
    Source: AMD
    AMD shares – technical analysis
    After breaking above its falling wedge pattern last week, a retest of the upper trendline of the wedge pattern was met with a near-term rebound, suggesting a shift in sentiments after its series of lower highs since August. A bullish crossover was formed on the moving average convergence divergence (MACD), with a reversal above the zero-mark indicating increased upward momentum. This appears to set its all-time high at US$122.38 in sight. Near-term support may be at US$110.60. This is where the Fibonacci 23.6% retracement level, which previously bring about some resistance in August, may now serve as support.
     
    Source: IG Charts
  11. MongiIG
    AMD’s share price is down more than 20% year-to-date. Can its upcoming Q4 results lift sentiments for its share price?
    Source: Bloomberg   Shares Advanced Micro Devices Price Valuation Central processing unit Gross margin  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Tuesday 25 January 2022  When does AMD report earnings?
    Advanced Micro Devices (AMD) is set to release its quarter four (Q4) financial results on 1 February 2022, after the market closes. Expectations for its Q4 earnings per share (EPS) is set to come in at $0.76, up 46.2% year-on-year (YoY) and 4.1% from the previous quarter.
    AMD earnings – what to expect
    A look at the past several quarters suggest that the sales momentum for AMD seems to show no signs of slowing yet. Overall gross margins continue to be on an upward trajectory since quarter three (Q3) 2020, coming in at 48.4% for its latest quarter. This marks an ongoing improvement towards the management’s long-term target of greater than 50% and suggests that pricing power for its products may remain intact for the upcoming Q4 2021 as well. The increasing trend for its inventory turnover ratio (4.9 in Q3 2021 compared to 4.7 in quarter two (Q2) 2021) suggests that demand continues to outpace supply and that may underpin further increase in pricing ahead.
     
    Source: AMD  
    The ongoing delay for Intel’s production of the 7-nanometre-based processors may also continue to support AMD’s potential gains in market share into the upcoming quarter. The release of Intel’s 7-nanometer chips was previously said to only be in late 2022 or early 2023, with no signs of any pull-forward in production timeline thus far. With that, AMD will continue to benefit from the robust demand in the server central processing unit (CPU) market, with capital spending from hyperscale cloud service providers showing no signs of easing.
    Any guidance for the acquisition of Xilinx will be on watch in the management’s earnings call. The revised timeline stated previously was to close the transaction in the first quarter of 2022. Expectations are for the deal to complete sooner or later, with the integration expected to be immediately accretive to AMD margins, cash flow and EPS, along with a boost to its total addressable market (TAM) from $79 billion to $110 billion.
    Where are the risks?
    That said, in line with the ongoing inflationary environment, higher input costs are expected to be reflected in AMD’s results. While gross margins are expected to hold up, net income margin is expected to trend lower from 22.1% in Q3 2021 to 20.4% for Q4 2021, followed by 19.4% in Q1 2022. With AMD’s leverage on Taiwan Semiconductor Manufacturing Company (TSMC) for chips production, this may leave AMD vulnerable to any increased pricing from TSMC, which may have a direct impact on its profitability. Thus far, it seems that AMD has been able to pass on some costs to its consumers to sustain its earnings, which may be a positive for now. That will continue to be on watch in the upcoming Q4 2021 results.
    Along with other tech stocks, AMD is also not spared from the recent sell-off as rising yields led markets to revisit some of the valuation for growth stocks. A look at AMD’s valuation compared to its peers do suggest that its valuation seems to fall on the high side, leaving it more sensitive to any increase in yields. On a forward price-to-earnings (P/E) basis, its forward valuation seems to tower above its peers, similar to NVIDIA. This suggests that expectations for outperformance are being priced and with that, just being in line with estimates may not necessarily be sufficient to drive any upside for share price.
     
    Source: Nasdaq AMD share price – technical analysis
    AMD’s share price seems to trade within a near-term falling wedge pattern, with an ongoing series of lower highs and lower lows pointing towards a near-term downtrend. A recent attempt to break back above the wedge pattern was met with a bearish rejection at the lower trendline, suggesting that the bears remain in control for now.
    Recent prices seem to have difficulty holding onto the $118.27 level, which will be a near-term resistance to overcome where a 50% fibonacci retracement level lies. Near-term support may be at the $110.60 level, where a previous resistance may now serve as support.
     
     
    Source: IG charts
  12. MongiIG
    We would love to hear from you, vote on the chip giants poll. Share any analysis with the Community and comment on this blog which is a better stock to hold?
    Mixed earnings and outlooks from chip giants AMD, Nvidia, and Intel leave investors in a cloud of confusion. IGTV’s Angeline Ong takes a look at the issues surrounding the sector to cut through the haze.
     
     Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Thursday 04 May 2023 Noise
    AMD, Nvidia, Intel … there’s so much noise in the chip space, it’s hard to hear yourself think. Let’s get you across the details first. Advanced Micro Devices Inc (All Sessions) shares slumped after the chip giant’s quarterly sales missed, due to a weak PC market. That is totally opposite to rival Intel Corp (All Sessions), which said the PC market would start rebounding in the second half, raising Intel's margins with it. Meanwhile, Nvidia, which analysts say has the bulk of the AI market, reports at the end of May. Ahead of that, NVIDIA and Australia’s Appen Limited said they were teaming up for AI solutions – the two already work together on developing speech AI and language models. Appen’s shares jumped on the news.
    How do you cut out the noise?
    To understand the sector, you also need to understand the politics, the US is worried that China will one day no longer need its chips so that’s why its redoubling its own chip development efforts. China is, of course, a huge market for the US. Nvidia already sells to China’s top tech firms including Tencent Holdings Ltd, Alibaba Group Holding Ltd (All Sessions) and Baidu Inc - ADR (All Sessions)
    However, having China as the global chip manufacturing hub also has potential downsides and risks. So, if you’re looking at investing in chips, it is important that you distinguish the players from the sector and understand the politics surrounding this industry. It’s been painful for those who shorted NVIDIA Corp (All Sessions). Short sellers have lost 5 billion dollars this year as Nvidia’s shares rose more than 90% so far in 2023, and we’re not even midway through.

  13. MongiIG
    Find out what to expect from AMD’s earnings results, how they will affect AMD share price, and how to trade AMD’s shares.
      Source: Bloomberg
      Shares Advanced Micro Devices Intel Price–earnings ratio Nvidia Graphics card
    Monte Safieddine | Market analyst, Dubai | Publication date: Tuesday 24 January 2023  When are AMD’s results expected?
    AMD is expected to release its Q4 earnings on Tuesday, January 31st.
    AMD share price: forecasts from Q4 results
    And those long AMD’s shares will be hoping that even if it misses both earnings and estimates as it did in its third quarter release, it can still enjoy a rise in prices, though the blow was cushioned by preliminary third-quarter results weeks prior that had already warned of lagged guidance. There was optimism about cloud revenue and server chips, but there’s no taking away what’s been happening on the PC side of the business.
    In turn, expect focus to be on how the PC market demand is faring after weakness there “and significant inventory corrections across the PC supply chain” were cited as reasons it couldn’t match earlier guidance, even if dull fourth quarter demand for computers is something its CEO says they’ve already been prepping for, especially if a part of its offering is seen as more discretionary (gaming) than necessary within that sphere, and at a time when demand from cryptocurrency miners is expected to remain sedate.
    Semiconductor prices (PHLX Semiconductor Index) finished the quarter a bit higher after brief lows in October and higher highs in November and early to mid-December.
    Their new line of data centre ‘Genoa’ chips was launched in November, and the release of its high-end graphics cards late last quarter, this at a time when high-end cards are unlikely to sell as fast in the current inflationary climate, with expectations late this year or early next year will fare better. Rival Intel released its own line of the latter, so it’s also a matter of how AMD has managed to keep up against both it and Nvidia. The extent to which Intel has been able to respond will be noted when it releases its figures this Thursday.
    In all, expectations are we’ll see earnings per share (EPS) reading of $0.67 matching the final figure for the third quarter, and revenue a tad lower quarter-on-quarter but still within the $5.5 billlion handle (source: Refinitiv). As for analyst recommendations, while there’s quite a number on hold (10), it’s a clear majority when looking at combined buy (18) and strong buy (12) recommendations and in all more optimistic than semiconductors overall where it’s also net majority buy.
    The average price target amongst them stands at $91.01, far higher than where its share price currently resides (source: Refinitiv). Both AMD and (more so) rival Nvidia continue to trade at forward price-to-earnings ratios (P/E) above the industry average.
    AMD weekly chart with key technical indicators
      Source: IG
    Trading AMD’s Q4 results: technical overview and trading strategies
    From a technical standpoint, prices have moved above their weekly short-term moving averages (MA), but have yet to cross their long-term MA’s with the 200-week not that far off. It recently pulled out of its longer-term bear trend channel (red shaded in the image above) the start of which was off its highs in November of 2021 as the tech sector suffered heavily in 2022, and the lift-off of last October’s lows (after its preliminary third-quarter earnings release hit the wires) consolidatory with slight positive technical bias.
    The daily time frame is showing a bit more positive technical bias though we’ve had a strong movement for the tech sector outperforming in general for over a week now. Prices are near the upper end of its daily Bollinger Band, and when it comes to its DMI (Directional Movement Index) showing a small positive margin between +DI and -DI.
    Zooming out to the weekly time frame however, it still has quite a bit of climbing to do to tilt a few key technical indicators, with a -DI still above its +DI thus far, and an ADX (Average Directional Index) reading no longer in trending territory.
    Summing up the overview on the longer-term weekly time frame and it’s a weak bear average where prices have managed to recover at times and oscillations weakening some indicators, but we're getting out of its bear channel meaning it’ll need less to shift to a more consolidatory overview provided the intraweek moves remain relatively contained.
    What it also means from a strategic standpoint is that conformist strategies are sell and contrarians buy, but with far more caution for the former when it comes to selling off its weekly 1st Resistance level, doing so only after a significant reversal if it comes to pass.
    Those expecting upside bias and further risk-on or especially ‘buy-everything’ moves can entertain contrarian buy-breakouts off the weekly 1st Resistance level or buy-after-reversals after its 1st Support, and more so for those expecting the worst with regards to its bear overview has passed.
    A reminder that when it comes to fundamental events – chief amongst them earnings – that technicals will hold less relevance and levels are far less likely to hold once the figures are released, last time around its share prices rose as much as 6% when third quarter numbers hit the wires at the beginning of October.
    IG Client sentiment* and short interest for AMD shares
    In what is usually the case with most single stocks, the bias was and remains extreme amongst for retail traders, at 92% near the beginning of this month and since then rising further to 95% as of the start of this week.
    As for short interest, it’s been hovering largely within the 30m-40m range since March of last year, with the latest reading 32.3m shares that represent 2% of shares, a slightly higher percentage than most of its larger rivals (source: Refinitiv).
      Source: IG
    *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 9am for the outer circle. Inner circle is from the 5th of January 2023.
  14. MongiIG
    What to expect and how to trade American Airlines upcoming results from a fundamental and technical perspective.
    Source: Bloomberg   Shares American Airlines Airline Price Market sentiment Market trend  Axel Rudolph | Market Analyst, London | Publication date: Thursday 13 October 2022  When are the American Airlines Group’s results expected?
    American Airlines Group Inc is set to release its third quarter (Q3) 2022 results on 20 October 2022. The results are for the fiscal quarter ending September 2022.
    What is ‘The Street’s’ expectation for the Q3 2022 results?
    ‘The Street’ expectations for the upcoming results are as follows:
    Revenue of $13.265 billion : +47.90% year on year (YoY)
    Earnings per share (EPS): $0.47 (>100% YoY)
    The American Airlines share price managed to stabilise above its near two-year early October low after raising its quarterly sales expectation earlier this week.
    The first of the four largest US airlines to publish its Q3 earnings, American Airlines now sees sales up 13% from the same period in 2019 and expects to post third-quarter sales above prior guidance. Pre-tax margin is expected to come in at 4.5%, above the airline’s guidance for up to 4%.
    It is the latest positive sign for the aviation industry which is witnessing an ongoing recovery in business class trips and comes after a number of US carriers were surprised by the strength of post-Labor Day leisure travel.
    The carrier also averted a pay strike by more than 50 of its aircraft maintenance technicians and crew chiefs at London’s Heathrow airport on Tuesday after agreeing a 19% pay deal with Unite, UK’s leading union.
    How to trade American Airlines into the results
    Source: Refinitiv Reuters Refinitiv data shows a consensus analyst rating of ‘hold’ for American Airlines – 1 strong buy, 1 buy, 14 hold, 2 sell and 1 strong sell - with the median of estimates suggesting a long-term price target of $14.25 for the share, roughly 16% higher than the current price (as of 12 October 2022).
    Source: IG IG sentiment data shows that 96% of clients with open positions on the share (as of 12 October 2022) expect the price to rise over the near term, while 4% of these clients expect the price to fall whereas trading activity over the last week and month showed 59% of sells.
    American Airlines – technical view
    Source: ProRealTime The American Airlines share price has dropped by over 34% year-to-date with it recently trading at levels last seen in November 2020 and heading down towards the $11.22 to $10.63 technical support zone which consists of the August-to-October 2020 lows. So far, the carrier’s share price seems to be stabilising above its $11.65 early October low.
    Should it be slipped through, a drop through the psychological $10 mark looks likely with the May 2020 low at $8.25 being in the frame as well.
    Since the American Airline’s share price has been sliding since its $26.09 May peak, by so far close to 55%, and since a series of lower highs and lows can be spotted on the daily chart since August – the definition of a downtrend –, further downside may be seen. This will technically speaking remain the case while no rise and daily chart close above the August high at $15.71 unfolds.
    For a short-term bullish reversal to become possible, a rise and daily chart close above not only the early October high at $13.05 but also above the May-to-October downtrend line at $13.22 would need to ensue. Only then could the September high at $14.67 be back in sight, a rise above which would be needed for a bullish trend reversal to gain traction.
    Source: ProRealTime Summary

    American Airlines is set to release Q3 2022 results on 20 October 2022

    Q3 2022 results are expected to show a near 48% YoY increase in revenue as well as an over 100% increase in EPS

    Revenue is expected to be boosted by stronger leisure and especially business class demand

    Long-term broker consensus suggests the share to currently be a ‘hold’, with a median price target of $14.25

    96% of IG’s clients with open positions are long the share but trading activity over the last week and month showed 59% of sells

    The American Airlines share price has been falling since April and year-to-date trades down 34% with the $11.22 to $10.63 support zone representing its next potential downside target zone. The share would need to see a bullish reversal and daily chart close above the August high at $14.67 to begin forming a longer-term bullish reversal pattern
  15. MongiIG
    With American Airlines slated to release its Q3 earnings on 19 October, the market braces for impact. From lowered earnings estimates to climbing operational costs and market sentiment, delve into what investors should watch for.
      Source: Bloomberg
      Shares Forex Revenue American Airlines Profit Operating margin  
     Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 16 October 2023 18:16 When will American Airlines announce its Q3 earnings?
    American Airlines Group (NASDAQ:AAL) is scheduled to unveil its quarterly financial results on Thursday, 19 October at 10 pm AEDT, prior to the opening bell of the stock market.
    What does 'The Street' expect from American Airlines' Q3 earnings?
    After a bullish Q2 outlook, American Airlines has dramatically scaled back its Q3 earnings per share projections from an initial range of $0.85 to $0.95 to a revised estimate of just $0.20 to $0.30.
    According to a consensus from analysts and brokers polled by Refinitiv as of October 16, 2023, the forthcoming Q3 results are anticipated to be:
    Revenue: $13.515 billion, marking a modest 0.39% YoY increase Earnings Per Share: $0.25, representing a significant 63.47% YoY decline The airline has faced operational headwinds that have led to this downgrade in earnings forecasts. Key contributing factors include escalating fuel and labour expenses, coupled with muted demand. Notably, the company incurred a $230 million cost in August, settling with the Airline Pilots Association.
      Source: Bloomberg
    What should you know?
    American Airlines is set to unveil its quarterly earnings on October 19, amid a climate of reduced expectations for Q3 performance Both the company and financial analysts have lowered their forecasts for the quarter, attributing the downgrade to a combination of escalating fuel and labor expenses, as well as revised, softer demand projections Despite holding a 'neutral' broker rating, American Airlines' shares are trading below the company's long-term average price target Currently in oversold territory, the share price of American Airlines Group faces bearish prospects in the short to medium term. Q3 2023 financial forecast overview
    Netflix Inc. has recently provided insight into its financial forecast for the third quarter of 2023. As a prominent player in the entertainment sector, key financial metrics for the company include revenue growth and operating margin, which serves as a measure of profitability.
    The company aims to accelerate revenue growth, expand operating margins, and generate increasing positive free cash flow. The market is likely to evaluate the forthcoming results against these metrics, as well as subscriber growth.
    Confidence boost: the role of paid sharing
    The company has conveyed heightened confidence in its financial outlook, owing to the successful roll-out of paid sharing. This initiative is projected to spur revenue growth in the latter half of 2023 as it is extended to nearly all remaining countries and continues to bolster the company's ad-supported plan.
    Q3 2023 financial forecast
    For Q3, the forecast indicates an expected revenue of $8.5 billion, marking a year-on-year increase of 7% on both a reported and currency-neutral basis. This represents a minor acceleration from Q2 2023's currency-neutral revenue growth rate of 6%. The revenue upswing in Q3 is anticipated to be propelled by an increase in average paid memberships.
    Challenges: ARPU and price increases
    However, the currency-neutral Average Revenue Per User (ARPU) is forecasted to remain flat or experience a slight dip year-on-year. This is attributed to the lapping of price hikes implemented in 2022 and the absence of price increases in the company's largest revenue markets since the first half of 2022. Earnings from advertising and additional member features are not yet substantial enough to counterbalance these elements.
    Subscriber growth: Q3 vs. Q2
    In terms of subscriber growth, Q3 2023 paid net additions are expected to align with Q2 2023 figures. The company anticipates a more significant acceleration in revenue growth during Q4 2023, driven by further monetisation of account sharing between households and a steady increase in advertising revenue.
    Profitability: looking beyond revenue
    On the profitability front, Netflix projects a Q3 operating income of $1.9 billion, up from $1.5 billion in Q3 2022, and an operating margin of 22%, an increase from 19% in the corresponding period last year. For the full year of 2023, the company is targeting an operating margin of between 18% and 20%, based on forex rates as of 1 January 2023, marking an uptick from 17.8% in FY 2022.
    Strategic outlook: future growth strategies
    Netflix is concentrated on fuelling growth and enhancing profitability through leveraged strategies such as paid sharing and advertising.
     
     
    How to trade the American Airlines Q3 2023 results
    Based on IG's TipRanks Smart Score, American Airlines Group is rated as a 'Hold,' featuring a long-term average price target of $16.17 per share as of October 16, 2023. While public sentiment leans bullish, it's noteworthy that hedge funds have been net sellers of the stock in the past quarter.
    American Airlines smart score chart
    Source: IG TipRanks   American Airlines echnical analysis
    From a technical analysis standpoint, the momentum for the short-to-medium term trend is currently bearish, with the stock price testing the critical support level at 11.85. Should the price close below this level, the next downside target would be 10.95. In such a scenario, traders considering a short position might look at a close above 12.85 as a key stop-loss point.
    The 10.95 mark becomes pivotal if tested, given the lack of substantial historical support until reaching the 9.05 level.
    For those traders inclined toward a long position, a bounce back from the current oversold status and a closing price above the 12.85 resistance level would be the indicators for potentially establishing new long positions.
    American Airlines daily chart
    Source: IG  
       
    This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  16. MongiIG
    Find out what to expect from American Airlines earnings results, how they will affect American Airlines share price, and how to trade American Airlines earnings.
      Source: Bloomberg
      Shares Price American Airlines Debt United States Hedge  
     Monte Safieddine | Market analyst, Dubai | Publication date: Monday 16 January 2023  When is the American Airlines results date?
    American Airlines Group is set to release its fourth quarter figures on the 26th of January.
    American Airlines share price: forecasts from Q4 results
    And it’s been two consecutive quarters of positive earnings per share (EPS) readings after what were negative prints prior dating back to the start of the pandemic.
    Initial hopes were that they’d be able to stay in the green, and the release late last week that the airline boosted revenue and profit estimates for the fourth quarter thanks to both higher fares and strong demand was no doubt a welcoming sight that boosted its share price sizably.
    The sector is cyclical in nature and hence suffered outflows alongside plenty of other cyclicals when recessionary fears increased, but reopening and the increased demand for travel as consumption focus shifts have both been seen as positive. Energy prices have averaged lower in the past quarter an added boon in terms of costs, though are much higher in annual terms and the airline avoiding fuel hedging is positive when prices drop relative to others utilising the expensive practice.
    There’s also the matter of managing its massive debt load – the largest amongst all US airlines – in what is a capital-intensive sector already leveraged due to the pandemic, and in a time of rate rises and a more difficult refinancing environment. Any excess liquidity is unlikely to be used to repurchase shares and instead of repaying debt early where possible as they did last month given focus will be on the airline’s debt this year, its former CFO Derek Kerr said that debt reduction “continues to be a top priority”.
    Managing costs be it energy, personnel, and also capital will be noted, as how demand has fared and what factor weather has impacted their figures, and so too their expectations of travel demand, as they anticipate a 10% increase in their unit costs excluding fuel and at the higher end of their previous 8-10% forecast.
    Rival Delta Air Lines released its earnings last Friday, and it managed to best both revenue and earnings estimates but suffered a drop in its share price on a weaker outlook for this quarter.
    Expectations for American Airlines – according to their filing – is that we’ll get an adjusted EPS figure between $1.12 and $1.17, far higher than what we saw in its third quarter 2022 release and opposite losses suffered for the same period a year prior. It’s also double the expected $0.58 before the revisions (source: Refinitiv).
    Revenue is expected to be closer to $13 billion, with American forecasting it could be higher having raised their expectations for revenue per seat mile.
    As for analysts’ recommendations (source: Refinitiv), a clear majority have opted for a hold (15) with one each in buy and strong buy territory, and a similar story on the other end with two at sell and one and strong sell. In all, it marks a significant change from what we saw a couple of years ago when it was a majority sell. In terms of their price targets, the average is below its current share price after the gains last Thursday.
    American Airlines weekly chart with key technical indicators
      Source: IG
    Trading American Airlines Q4 results: technical overview and trading strategies
    The technicals on the weekly time frame have painted a much more positive picture after the strong gains last week, with relatively rangebound movement in its share price over the past seven months narrowing some of its key technical indicators.
    Prices are above all its main short-term weekly moving averages (MA) and recently crossed its 50-week while still below both 100-week and 200-week MA’s. They’ve also breached the upper end of the Bollinger Band that narrowed on oscillations leading up to the start of last week.
    When it comes to its DMI (Directional Movement Index), its +DI is above its -DI with a positive cross back in December.
    Oscillations to the downside since March of last year have meant negative DMI crosses have on average enjoyed more follow-through, but if it’s consolidatory moves with or without positive technical bias from here on out and that might change the narrative for those using this indicator. Its weekly ADX (Average Directional Movement Index) reading isn’t in trending territory and hasn’t been for over a year.
    Putting it all together and from a technical standpoint the overview is classified as consolidatory on the weekly time frame but with positive bias building due to last week’s fundamental release and the lift off last December’s lows and oscillations prior to narrowing key indicators.
    The daily time frame is showing more positive bias with its ADX in trending territory but an RSI (Relative Strength Index) in overbought territory, an overview that’s more stalling bull.
    Going back to the weekly time frame, and as with any consolidatory technical overview that enjoys positive bias conformist strategies usually involve reversals be it selling the weekly 1st Resistance level after it has been breached by a margin and shorting only if prices go back to that level and buying via fade strategies off the 1st Support. Those opting to go contrarian can consider breakout strategies with buys off the 1st Resistance if prices move north or sell-breakouts off the 1st Support if prices make a move back down to the lower end of the band.
    As always and with any fundamental event, technicals usually hold less relevance and more so if the results veer far from expectations, making levels holding a far more difficult task and more so given how they’ve narrowed due to mostly range-bound movement prior to last week.
      Source: IG
    IG Client sentiment* and short interest for American Airlines shares
    Retail trader bias has remained in extreme buy territory but has dropped from 97% to 92% after the big gains last Thursday, no doubt beneficiaries of the latest moves (see image below).
    As for short interest, it’s been oscillating around the 80-90m mark for some time now with the latest at 89.8m, and far below the 2020 pandemic ranges that at times reached nearly double that amount (source: Refinitiv). It represents nearly 14% of shares floated and is much higher in comparison to the remaining “Big 4” major US national airlines.
      Source: IG
    *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the 5th of January 2023.
  17. MongiIG
    Despite robust air travel demand, American Airlines’ share price is still down 32% over the past one year. Can its Q1 earnings provide a positive surprise?
    Source: Bloomberg   Shares Commodities Demand United States Airline American Airlines  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 20 April 2023  When does American Airlines report earnings?
    American Airlines is set to release its quarter one (Q1) financial results on 27 April 2023, before the market opens.
    American Airlines’ earnings – what to expect
    Recent update of its Q1 profit outlook came with disappointment, as the airline expects post-adjusted earnings per share (EPS) to come in between one and five cents. While this is higher than the previous forecast of near break-even, that guidance has underperformed the six cents expected by markets.
    Refinitiv estimates suggest that revenue may continue to deliver with a 37.2% year-on-year growth, just a slight tick lower than the 39.9% growth in Q4 2022.
    Travel demand and airline fares still resilient, but can it last?
    A look at the US Transportation Security Administration (TSA) checkpoint numbers suggests that travel demand has remained robust in Q1 2023, particularly with an eye-catching recovery in February-March pushing back against speculations that travel demand has peaked. Some resilience seems to be reflected here, as though the restrictive rate environment has yet to feed into consumers’ desire to travel.
    To top it off, after eight months of decline, US airline fares are also back on the move with a sturdy reversal in February 2023. The confluence of higher travel volume and higher airline fares could still serve as positive contributors to AAL’s upcoming 1Q results.
    Source: Transportation Security Administration (TSA) Source: U.S. Bureau of Labor Statistics With 1Q 2023 guidance laid out, more focus could be on 2Q 2023 outlook
    That said, the sustainability of consumer demand over the coming quarters will be the key focus, as discretionary travel spending is still at the mercy of weaker economic conditions. With the 1Q 2023 guidance laid out (and share price reacted accordingly with a 9.2% sell-off), market watchers will be looking for any positive surprises in terms of the 2Q outlook, especially when it marked the beginning of the summer travel season.
    Based on Refinitiv estimates, the next two quarters are expected to see AAL’s quarterly revenue top out, so any pushback on that front will provide the much-needed reassurances for some relief.
    Elevated costs remain the key challenges for earnings
    From the company’s earlier guidance, persistently high fuel and labour costs continue to instil downside risks for earnings, offsetting some of the positive effects from resilient travel demand. Still-low unemployment rate and elevated job opening numbers continue to keep labour costs on a slow grind higher, while a surprise move to cut oil production by the Organization of the Petroleum Exporting Countries Plus (OPEC+) has a renewed lift for oil prices in March.
    These will be earnings headwinds which the management will have to address and for now, it seems that elevated cost pressures will remain for longer while travel demand faces the risks of fizzling out ahead, which kept some investors shunning.
    Technical analysis – Several resistance needs to be overcome to establish renewed uptrend
    AAL’s share price seems to be trading within a longer-term descending triangle pattern, as intermittent attempts to rally thus far eventually failed to sustain. Several resistance will have to be overcome, in order to provide greater conviction of a renewed upward trend. This includes its key 200-day moving average (MA), along with the downward trendline resistance.
    For now, a potential bullish divergence in moving average convergence/divergence (MACD) may point to some abating selling pressure, but any upside could still be a correction phase for a new leg lower. The US$12.00 level will be a key support to watch, having kept prices afloat on at least three occasions over the past year. A breakdown of the level could potentially pave the way to retest the US$10.60 level next.
    Source: IG charts
  18. MongiIG
    Money management is all about capital preservation, so that one will be able to stay in the game for the long haul.
    Source: Bloomberg   Indices Investment management Risk Asset Nasdaq-100 Analytics    Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 13 July 2023  Preserving your capital is the key to even staying in the game
    Many traders tend to focus on achieving a high win rate in their trades, but an often overlooked but essential aspect of the trading process is also about money management. Money management is all about capital preservation, so that one will be able to stay in the game for the long haul and not let an unexpected streak of losing trades wipe out the entire portfolio. A phrase basically summarises it: “Trading is a marathon and not a sprint”.
    As an example, a trader may have a high winning rate of 80%, but if the losses from the 20% losing trades are large enough to wipe out all the profits from the winning trades, the trading account could still be unsustainable over the long run. A common trading statistics is that 90% of all traders fail and while there are many reasons to account for the high failure rate, poor money management may be one key reason as to why trading accounts are blown quickly.
    Example: A trader with high 80% win rate but less ideal money management
    With that, here are some concepts that may be useful for staying in the game:
    1. Stagger your trade position into different entries to limit your risk
    When a trader has established a view on the direction of a certain asset, he/she may have the tendency to go all-in on a single trade. While that is surely up to one’s risk appetite, the risks are relatively higher as compared to splitting up the entries into different tranches, especially if the asset price does not move as initially intended.
    As an example, in January 2023, a trader may establish that a trend reversal could be in place for the Nasdaq 100 index after seeing an upward break of a key trendline resistance and its 200-day moving average (MA).
    He may choose to go all-in with a long-positioning in the Nasdaq 100 index there and then, but he should be prepared to weather the losses if things do not go his way. On the other hand, he may prefer to put in one-third of his intended positioning, wait for subsequent confirmation of the upward trend potentially on a breakout to new higher high, before building up his positioning further. On the downside, he may use a trailing-stop loss to protect his profits because capital preservation will always be the key to staying in the game.
    The example is as depicted below. Fair enough, some may argue that he will be much more profitable if he chose to put in all of his intended positioning at one shot back in January 2023, but he will also run the risk of experiencing hefty losses if the breakout turns out to be a false signal, which could end up wiping out a significant portion of his portfolio. Staggering out the entries may allow one to seek for more signs of trend confirmation. Furthermore, a trend tends to build over a period of time, which should provide one with ample opportunities to buy on retracements or to buy on breakouts.
     
    Example:
    Source: IG charts  
    2. Limiting the amount to risk on each trade
    However convinced you are in a trade setup, there is always the chance that it could turn out wrong. With that, being overly exposed to a single asset in your trading account can end up increasing the likelihood of taking on significant losses, even if you have risk management measures in place.
    Placing a limit on how much to risk on each trade may avoid having a series of bad trades draining out all the profits in your account. This may be done through limiting a certain percentage of your portfolio eg. 5% or 10%, or by an absolute amount.
    For example, if you have a system to risk 2% of your $100,000 portfolio on each of your trades, a drastic scenario of having ten consecutive losing trades will leave you with $81,700 to still stay in the game. In the case of using an absolute amount, with a system to risk $2,000 on each of your trades, ten consecutive losing trades will leave you with $80,000. Having a system in place and the discipline to adhere to it will help you avoid overextending yourself to just a small handful of trades, which may be the ultimatum to wipe out your portfolio.

    3. Build on your strength and limit areas of weakness
    After trading for some time, you will be able to clock some statistics on your trading performance for a certain asset (or how badly). Otherwise, the IG platform has a trade analytics tool to track your trades and provide you with a breakdown of key metrics such as return rate, win rate and profit/loss ratio on your trading history.
    Based on the information, you will be able to establish which are your areas of expertise and also if your average losses are consistently towering above your gains. Instilling a suitable risk-to-reward ratio for each trade may be an approach to ensure that losses are kept relatively small as compared to potential gains. The key here may also be to focus more on your strength and reduce your position sizing at areas of weakness until performance shows significant improvement.
    Example:
    Source: IG
  19. MongiIG
    STOCK MARKETS
     

    NEW YORK (Reuters) - Stock investors are watching the dramatic moves in the Treasury market for clues on the fate of one of this year’s most successful plays - the so-called reflation trade that helped power shares of economically sensitive companies higher after nearly a decade of underperformance.
    Investors piled in to shares of energy producers, banks and other companies expected to benefit from a powerful economic rebound earlier this year while betting that Treasury yields, which move inversely to prices, would rise.
    That trade appears to be tottering now, as worries over slowing growth send yields tumbling to their lowest level in more than four months. While stock markets appear placid, with the S&P 500 hovering near a record high, a rotation beneath the surface has accelerated in recent weeks, as investors move out of economically sensitive names and back in to the big technology and growth stocks that led markets higher for most of the last decade.
    "If we do see a further drop in interest rates, if we do get below that 1.3% level in any kind of meaningful way, that is going to confirm that growth over value has returned and it is not just a head fake," said Matt Maley, chief market strategist at Miller Tabak.
    The S&P 500 has gained 7% since the 10-year Treasury yield hit a recent high in mid-May. A look under the hood, however, shows signs that a change in stock-market leadership may be taking place. The Russell 1000 growth index has gained over 13% since mid-May while the counterpart value index has climbed about 1.5% over the same time.
    "We do not expect the reflation and rotation trades to return to their former glory," while materials and energy stocks will likely be held back by falling commodity prices, noted Oliver Allen, markets economist at Capital Economics, in a note to clients. "The big boost to rotation from recovering risk appetite and rising growth expectations may mostly be over," he said.
     
    U.S. value vs growth stocks in 2021 https://graphics.reuters.com/USA-STOCKS/VALUE/xklvyxjlkpg/chart.png
     
    Concerns about the economic impact of the Delta variant of the coronavirus and falling commodity prices are helping push bond prices higher. At the same time, the Federal Reserve surprised many investors last month with a hawkish turn that suggested two interest rate hikes by 2023, calling into question its commitment to allowing inflation to run hot for a time.
    One key question for investors is whether recent signs of rising inflation - including the latest data on existing home prices, which showed them rising by their fastest pace in 15 years in April - will be short-lived.
    Federal Reserve officials last month felt further progress on the U.S. economic recovery "was generally seen as not having yet been met," but agreed they should be poised to act if inflation or other risks materialized, minutes of the central bank's June policy meeting showed.
    "The market going into the last FOMC meeting assumed that the Fed was comfortable with an inflation overshoot, but it became clear that the magnitude of how comfortable they were with an overshoot came down considerably," said Mike Sewell, a portfolio manager T Rowe Price, who expects that the 10-year Treasury has already hit its highest level for the year.
    Stocks’ relative calm does not mean that equity investors are impervious to growth worries.
    BlackRock Inc (NYSE:BLK), the world's largest asset manager, said on Wednesday in its mid-year investment outlook that it cut its position in U.S. equities to neutral, in part due to expectations that corporate profit margins will decrease.
     
    Meanwhile, a client survey from JP Morgan showed net bearish bets against Treasuries falling to their lowest level since late April in the week to July 6, while bullish positions stood at their highest since late March, suggesting there may be limited fuel for more downside moves in yield.
    "It will be interesting to see how positioning unfolds to see if there is enough of a washout to make the market cleaner and just more driven by fundamentals,” said Chuck Tomes, associate portfolio manager on the global multi-sector fixed income team at Manulife Investment Management.
     
    By David Randall and Lewis Krauskopf, (Reuters). Investing.com
    Date: 8th July, 2021
  20. MongiIG
    Major US indices continue to come under pressure overnight, as the release of the US ISM manufacturing PMI reading adds to the list of recent data pointing to a challenging ‘disinflation’ process.
    Source: Bloomberg   Forex Indices Shares /business/market_index United States Euro  Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 02 March 2023  Market Recap
    Major US indices continue to come under pressure overnight, as the release of the US Institute for Supply Management (ISM) manufacturing Purchasing Managers' Index (PMI) reading adds to the list of recent data pointing to a challenging ‘disinflation’ process. While the overall figure came in lower than expected (47.7 versus 48 forecast), the prices paid by manufacturers surprised to the upside by a wide margin (51.3 versus 45.1 forecast). This marks the first time prices have reverted back into expansionary territory since October 2022. While it could take more data to confirm a trend, rate hike expectations recalibrated to the data with further bets towards a higher terminal rate. Federal Reserve (Fed) policymakers also followed up with a hawkish echo, with the Fed voting member, Neel Kashkari, putting the possibility of a 50 basis-point hike on the table this month.
    With that, the two-year Treasury yields touched a new high since 2007, while the ten-year yields crossed the 4% level. That puts the pressure on rate-sensitive growth sectors, with big tech stocks unwinding their previous gains. Apple’s share price has fallen below its 200-day moving average (MA). Despite rising rate expectations, the US dollar failed to move higher overnight, as the 105.00 level remains a key resistance level to overcome. A break above this level could open the path to retest its 200-day MA next. With the US dollar taking a breather, gold and silver prices saw some room for relief, with technical conditions revealing a shift into neutral territory from previous oversold levels.
     
    Source: IG charts  
    Asia Open
    Asian stocks look set for a slightly positive open, with Nikkei +0.28%, ASX +0.38% and KOSPI +0.68% at the time of writing. Following the outperformance in China’s PMI readings for the second straight month, the Hang Seng Index has delivered strong gains (+4.2%) in yesterday’s session, rejecting a retest of its key 200-day MA. The session today may be more measured however, as the Nasdaq Golden Dragon China Index saw some paring of gains after an initial jump higher, with the broader risk environment not providing much of a tailwind.
    The Singapore’s SIPMM manufacturing PMI figure will be released today, with its manufacturing activities trending into contractionary territory for the past five consecutive months. Further weakness is expected, as global economic conditions weigh while the positive knock-on impact from China’s recovery could take some time to play out.
    For the Straits Times Index (STI), two consecutive weeks of aggressive net outflows from institutional investors have brought the index back towards a previous consolidation base at the 3,230 level. Any break lower could open the door to retest the 3,170 level next. The index’s heavyweight, DBS, is currently trading back below its 200-day MA for the first time since August 2022, which may keep the pressure on the index.
     
    Source: IG charts  
    On the watchlist: GBP/EUR plunged on Germany’s inflation surprise
    Expectations for a disinflationary trend in Germany were challenged yesterday, as headline inflation reading surprised to the upside, coming in at 8.7% versus 8.5% forecast (harmonised rate at 9.3% versus 9% forecast). The data should keep the European Central Bank (ECB) firmly on its hawkish path, with a 50 basis-point hike in March looking to be a done deal. To add to the downside pressure for GBP/EUR, UK house prices saw its first annual fall in three years, reinforcing a slowdown in economic conditions.
    On the four-hour timeframe, the sell-off in GBP/EUR follows after the formation of a bearish divergence on Moving Average Convergence/Divergence (MACD). This brought the pair to retest a key upward trendline, which is attempting to keep the higher-lows narrative. A break below the trendline support could pave the way towards its February low at the 1.114 level. Resistance to overcome will be at the 1.135 level, where a Fibonacci confluence zone resides.
     
    Source: IG charts  
    Wednesday: DJIA +0.02%; S&P 500 -0.47%; Nasdaq -0.66%, DAX -0.39%, FTSE +0.49%
  21. MongiIG
    Hebe Chen | Market Analyst, Melbourne | Publication date: Monday 01 May 2023 04:41 Apple Earnings Date
    Apple will report its March quarter earnings on May 4th 2023 after the US markets close. The report will be for the calendar quarter ending Mar 2023, or Q2 2023 based on the company’s fiscal calendar.
    Apple Earnings Expectation
    Apple's Q2 2023 earnings are anticipated to report a decline of 5% to 6% in both revenues and EPS.
    The consensus EPS forecast for the quarter is $1.44, representing a decline of 6% from the same quarter last year ($1.52)
    The projected revenue will be $92.84B, substantially down from $117.15B reported in the last quarter and 5% less than the same period in 2022 ($97.28B).
    Apple Earnings Key Watch
    Apple’s product line  
    Apple missed its earnings versus consensus expectations in the previous quarter, the Q1 2023. Its first earnings missed in almost seven years. Unfortunately, the winter season seems far from over.
    In the previous quarterly report, Apple's Mac revenue tumbled by 28.66% from $9.63 billion to $7.74 billion. For the upcoming reported quarter, the downtrend is projected to accelerate after Apple reported a significant 40% decrease in Mac shipments in the first calendar quarter of 2023, from 6.9 million in Q1 2022 to 4.1 million in Q1 2023.
    The result in its Smartphone segment is slightly better but not too promising. The expectation is for Apple to post a revenue decline of -8% in fiscal Q1 versus a decline of 5.49% in the last report.
    According to research conducted by Canalys, global Smartphone shipments shrank by 13% in Q1 2023, but Apple's market share increased to 21% from 18%, offsetting part of the decline.
    The only sector that may welcome some positive numbers is its tablet segment. In the last quarter, iPad revenue surprisingly rose by 29.66% year-over-year, reaching $9.4 billion, beating the estimated $7.76 billion by 20%. The main driver behind this growth, the rebounding demand from China, is likely to continue into the March quarter.
    Source: Canalys Apple’s service line Another silver lining for Apple is its services segment, which saw a 6.4% year-over-year increase in revenue in the prior quarter and accounted for 17.7% of total sales, up from 15% the previous year. This segment is expected to provide Apple with another layer of "polish" in the long term, thanks to its higher margins generated by the recurring revenue model.
    Apple’s Immigration Plan A potential resurgence in Chinese sales, after COVID-19 restrictions fully ease and workers return to offices, in the first 90 days of this year may help to offset the downtrend in other areas. After all, the Greater China market represents one-fifth of the company's total revenues.
    But Apple is looking beyond that.
    In the to-be-unveiled report, India will be classed as an individual sales region for the first time under the “Net sales by reportable segment”. In the year leading up to March, India generated almost $6 billion in revenue for Apple, an eye-widening 50% year-over-year growth.
    Apple not only focuses on sales but also determines to relocate its manufacturing line out of China, where the company has resided for decades.
    According to JPMorgan Chase, by 2025, one out of four iPhones will be made outside of China. Thailand will become the new home to MacBook, while AirPods earphones will be made in Vietnam.
    As Apple puts down roots in new Asian markets, whether or not the new soil will bring forth new blossoms, it will be an interesting sight to witness.
    Apple Stock price Technical Analysis
    Turning to Apple’s share prices action, after surging by nearly 30% this year, Apple’s stock price is now approaching a seven-month-high as well as the unclosed gap area between $169 and $171. This area used to trigger a 26% downfall from last August to early January.
    The possibility of a bullish breakout should be supported by a positive earnings report, in which case we could see a rally toward $172 until meeting with the upper boundary of the ascending trajectory.
    Conversely, if the report fails to please its shareholders, a pullback should bring the initial support at $165 in view. Any further downtrend from this level could lead to an aggressive challenge to the long term trendline from January this year and spark a bearish reversal.
    *IG Sentiment on April 28th
  22. MongiIG
    Apple is set to release its Q4 2023 earnings on November 3, facing market expectations of a slight revenue decline but an EPS rise. Will challenges in the China market and big tech sentiment affect its performance?
      Source: Bloomberg
      Shares Apple Inc. iPhone United States China Huawei    Yeap Jun Rong | Market Strategist, Singapore | Publication date: Monday 30 October 2023 08:59 When does Apple Inc. report earnings?
    Apple Inc. is set to release its Quarter Four (Q4) financial results on 3 November 2023, after the market closes.
    Apple’s earnings estimates
    Current market expectations are for Apple’s Q4 revenue to decline marginally by 1% year-on-year to US$89.3 billion, compared to US$90.1 billion a year ago.
    On the other hand, Earnings Per Share (EPS) is expected to be at US$1.39, up 7.7% year-on-year and 10.3% from the previous quarter. Its Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) margin is expected to improve to 32.2%, up slightly from the previous quarter’s 31.9%.
    Market impact of Apple's earnings
    Being one of the "Magnificent Seven" stocks, which account for the bulk of the US indices’ gains year-to-date, its upcoming earnings may play a crucial role in determining the indices' trend into year-end.
    Historical performance
    Apple generally has a strong record of outperforming, only failing to meet earnings estimates once over the past 20 quarters. That said, the recent sell-off in big tech share prices, despite delivering top and bottom beats, indicates that market participants also have high expectations as to whether current earnings momentum can be maintained.
    Historical revenue and EPS chart
     
    Source: Refinitiv Challenges in the Greater China market
    The Greater China market accounted for one-fifth of Apple’s revenue last year. Thus far, there isn't much conviction that demand on that front can hold up. A report from Counterpoint Research suggests that iPhone 15 sales for the first 17 days in China have underperformed last year’s iPhone 14 sales (an estimated 4.5% lower). Unit sales of the higher-end Pro Max and Pro models are down 14% and 11% year-on-year, respectively.
    Competition from Huawei
    Apart from attributing the weaker iPhone demand to cautious Chinese consumers, Huawei’s newly launched Mate 60 series has also proven to be strong competition. Reports suggest that Huawei’s smartphone sales growth has increased 37% year-on-year in Q3 2023 (versus Apple’s estimated 10% decline), as its new Kirin chips, launched as a response to US tech sanctions, seem to be well-received.
    Positive signs in the US market
    On the other end of the globe, reception for the iPhone 15 series in the US (Apple's main market) may offer some cushion, with estimated double-digit increases from a year ago. Current expectations are that the overall net effect may still drive a slightly lukewarm 2.4% year-on-year increase in iPhone revenue for the Q3 2023 results.
    Hardware performance overview
    Conversely, other hardware products are expected to weigh longer, with further contraction anticipated year-on-year (estimated iPad -14.6%, Mac -24.7%, other products -2.2%).
    Source: Refinitiv Services business: a bright spot
    Unsurprisingly, expectations are for growth in Apple’s services business to continue accelerating to 11.4% year-on-year in Q3 2023, up from the previous quarter’s 8.2%. This segment has been Apple's crown jewel in recent years, being its highest-growth and highest-margin business, along with a recurring revenue model. It includes subscriptions, warranties, licensing fees, and Apple Pay.
    Upcoming products and innovations
    Any guidance around Apple's growth catalysts will also remain under scrutiny to diversify the company’s revenue stream away from iPhone sales (48.5% of total revenue) over the longer term. Apple has previously announced its Apple Vision Pro headset, expected to launch early next year.
    Focus on Artificial Intelligence
    More notably, Apple's work on generative Artificial Intelligence (AI) may be in greater focus. Given that the company is reportedly investing millions of dollars per day on multiple AI models across several teams, any fresh updates on generative AI tools, models, or services will be closely watched.
    Technical analysis
    Apple’s share price has broken below its Ichimoku cloud support on the daily chart back in August of this year, and subsequent attempts to reclaim this zone have been unsuccessful.
    Buyers will now face the challenging task of having to reclaim the 200-day MA to provide some conviction of near-term upside. Failing that, prices may potentially head lower to retest the US$161.04 level, where a near-term lower channel trend line may coincide with a key Fibonacci retracement level.
    Apple daily chart
    Source: IG charts     IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

    The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

    No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
    Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
  23. MongiIG
    Apple Q2 2022 earnings to grow marginally against a strong comparative in the prior year
    Source: Bloomberg   Shares Apple Inc. Price Market sentiment Revenue iPhone  Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Friday 22 April 2022  When are the Apple results?
    Apple Inc. the world’s largest company by market capitalization, is set to report second
    quarter results on Thursday 28 April 2022.
    What ‘the Street’ expects from Apple Q2 2022 results?
    Apples upcoming quarter two (Q2) 2022 results find a strong base of comparison in the prior year’s corresponding Q2 2021. Logistical constraints saw a strong proportion of shipping of the then new 5G Iphone offerings move from quarter one (Q1) to Q2 in the 2021 fiscal year. The unwind of hard lockdown parameters over the prior year’s comparative period also saw demand for Mac’s and Ipads boosted on the return to work and reopening of the US economy.
    Iphone 13 sales will be the primary driver of revenue in Q2 2022 and should support marginal revenue and earnings growth. While we are now moving to what looks like a post Covid-19 pandemic recovery era, supply chain disruptions will be a factor to consider, especially in lieu of chipsets across products.
    A consensus of estimates from Refinitiv data for the upcoming Q2 2022 Apple results arrive at the following:
    • Revenue for the quarter of $94.024 billion : +4.98% year on year (YoY)
    • Earnings per share (EPS) for the quarter of $1.43 (+2.15% YoY)
    How to trade Apple results
    In terms of an institutional view as of 21 April 2022, a Refinitiv poll of 46 analysts have an average rating of ‘buy’ for Apple, with a long-term price target (mean) of $193.28. This suggests that the current price as of 21 April 2022 trades at a 16% discount to what is deemed a longer term fair value for the share.
    Source: Refinitiv In terms of a retail trading view, as of 21 April 2022, IG Client Sentiment data shows 88% of IG clients with open positions expect the price to rise in the short term, while 12% expect the price to fall in the near term.
    Source: IG Apple share price – technical view
    Source: IG charts The long-term trend for the Apple share price remains up. In the near term we have seen a correction from highs.
    The correction has taken the shape of a bullish flag formation (shaded area on chart). This pattern is a suggestion that the preceding uptrend is setting up to continue. A close above flag resistance would confirm the bullish continuation pattern and suggest 179.40 as an initial upside resistance target from the move. Traders who do find long entry into this scenario (should it occur) might consider using a close below the 163.20 level as a stop loss indication for the trade.
    Even if the flag breakout we are expecting does not occur we would still keep a long bias to trades on the share, hoping for a bullish price reversal to occur before the price reaches trend line support.
    Only on a break of trend line support would we reconsider our long bias to trades on the stock.
    Summary
    • Q2 2022 results are scheduled for 28 April 2022
    • Revenue for the quarter of $94.024 billion expected
    • EPS for the quarter of $1.43 expected
    • The average long-term broker rating consensus for Apple is ‘buy’
    • 88% of IG clients with open positions on Apple expect the price to rise in the near term
    • The long-term trend for Apple remains up, with a short term bullish continuation pattern forming
  24. MongiIG

    Apple share price: Q4 earnings preview

    By MongiIG,


    Market News
    Apple share price: Q4 earnings preview
    Apple Q4 earnings to be driven by iPhone 12 sales.
    Source: Bloomberg   Shares Apple Inc. Price iPhone Revenue COVID-19 pandemic  Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 21 October 2021  When are the Apple results?
    Apple Inc. the world’s largest company by market capitalization, is set to report quarter four (Q4) 2021 earnings on 28 October 2021.
     
    What ‘the Street’ expects from Apple Q4 2021 results?
    Apple Inc. no longer issues forward guidance for its quarterly results due to the Covid-19 pandemic, its effects on supply chains and in turn the uncertainty of future earnings.
    That being said, Apple has done very well through the Covid-19 pandemic period and has had a very strong year thus far. The follows on from the June quarter where revenue records were realized in each of the group’s geographic segments and double-digit growth was recorded in each of the group’s product categories.
    iPhone 12 demand is expected to be the primary driver of revenue and earnings growth, while iPhone 13 sales will only have a material impact on the next reporting quarter (Q1 2022). Markets will be hoping that forward guidance from the group is reinstated with a particular focus on how chip shortages could effect sales going forward. For the reporting quarter however, iPhone sales are suggested by JP Morgan to be within the range of 55 to 58 million units, equating to around $46 billion in sales.
    A consensus of estimates from Refinitiv data for the upcoming Q4 2021 Apple results arrive at the following:
    Revenue for the quarter of $84.8 billion Earnings per share (EPS) for the quarter of $1.23 How to trade Apple results
    In terms of an institutional view as of 20 October 2021, a Refinitiv poll of 42 analysts have an average rating of ‘buy’ for Apple, with a long-term price target (mean) of $168.35.
     
    Source: Refinitiv  
    In terms of a retail trading view, as of 20 October 2021, IG Client Sentiment data shows 93% of IG clients with open positions expect the price to rise in the short term, while 7% expect the price to fall in the near term.
    Source: IG Apple share price – technical view
    Source: IG charts  
    In our previous earnings preview note on Apple, we looked at the price breaking out of the bullish triangle formation. The move fell marginally short of the 160.50 projected target and the price has since retraced back to the 200 day simple moving average (SMA) displayed by the blue line.
    The ‘w’ shape below the 143.50 level is known as a double bottom formation in technical analysis terms. In context this pattern suggests that the correction or downtrend since the recent price high for Apple is now over.
    160.50 continues to be our favoured upside target as the short-term trend now resumes up in line with the longer-term uptrend. Only on a move below the 200 day SMA currently at 135.80 would we reassess the merits of our long bias to trades on Apple.
    Summary
    Q3 2021 results are scheduled for 28 October 2021 Revenue for the quarter of $84.8 billion expected EPS for the quarter of $1.23 expected The average long term broker rating consensus for Apple is ‘buy’ 93% of IG clients with open positions on Apple expect the price to rise in the near term The long term trend for Apple remains up The short term uptrend for Apple has resumed
  25. MongiIG
    Apple’s share price: what to expect from its Q3 results
    Source: Bloomberg   Shares Apple Inc. iPhone Market trend Price Share repurchase  
     Yeap Jun Rong | Market Strategist, Singapore | Publication date: Friday 21 July 2023  When does Apple Inc report earnings?
    Apple Inc is set to release its quarter three (Q3) financial results on 3 August 2023, after market closes.
     
    Apple’s earnings – what to expect
    Current market expectations are for Apple’s Q3 revenue to decline 1.7% from a year ago, turning in its third straight quarter of contraction but coming off a smaller decline from the -2.5% in Q2.
    Likewise, earnings per share (EPS) are expected to decline 0.7% year-on-year, a softer read than the flat growth in Q2. However, its EBITDA margin is expected to remain resilient at 31.8%, just a slight downtick from the 32.9% in the previous quarter.
    Being a heavyweight in the Nasdaq, its year-to-date gain of 54.5% has contributed significantly to the index’s outperformance. Undoubtedly, all eyes will be on its upcoming earnings release to determine whether the Nasdaq’s rally has further room to run in the near term.
     
    Subdued Greater China’s recovery could remain a drag, Apple services to stay resilient
    The Greater China market accounts for one-fifth of Apple’s revenue and thus far, recovery on that front has not been as promising as what many initially expected. A look at the China’s economic surprise index has revealed its lowest level since May 2020, which points to the challenging economic conditions for one of Apple’s iPhone key markets.
    Amid this backdrop, iPhone sales for Q3 2023 are expected to contract 1.5% from a year ago, before a stronger recovery can be seen through the rest of the year. Other product demand are also expected to stay weak, with iPad and Mac sales expected to decline by 11.6% and 14.1% year-on-year respectively.
    The more consistent showing will be its services segment, which is expected to grow 5.8% in Q3 2023, up slightly from the 5.5% in the previous quarter. The segment has delivered an all-time record with $20.9 billion in revenue in the previous quarter measured and the momentum seems primed to continue, given the stickiness of the ecosystem. That may aid to cushion the prevailing weaknesses in hardware sales in the meantime, until conditions improve on those fronts.
    Source: Refinitiv  
    Market pricing for a subsequent recovery and future growth potential
    Nevertheless, with Apple’s share price pushing to a new all-time high, much may be priced for future recovery, with Q3 2023 expected to validate views of a potential bottom in both its top and bottom-line growth. In the previous quarter’s earnings call, the management’s guidance has carried some reservations around the macroeconomic environment, and eyes will be on whether a more optimistic tone could be struck this time round with the mounting views of a ‘soft landing’.
    With a forward price-to-sales valuation of 7.5, a premium also seems to be priced for future growth potential. This valuation is more lofty than that of Meta Platforms (5.9) and Alphabet (4.9), but on par with Tesla (8.0).
    Several growth catalysts remain on watch to potentially diversify the company’s revenue stream away from iPhone sales (54% of total revenue) over the longer term. While monetisation efforts will not be reflected in the upcoming results, clues will be sought on the respective launch plans and initial progress to support Apple’s growth momentum into next year.
    This includes the New Vision Pro headset announced last month, which is expected to launch early next year. Apple is also tapping on its huge user base to include financial services as part of its ecosystem, such as offering a high-yield saving account program for Apple Card holders and “buy now, pay later” offerings (Apple Pay Later). Not to mention its recent venture to join the Artificial Intelligence (AI) chatbot race with its Apple GPT tool.
    Apple also typically releases new iPhones in September and is expected to take the wraps off the new iPhone 15 range this year. While an announcement may be made closer to late-August, this will be something to put on the radar, especially with recent chatters of display manufacturing issues potentially causing some delays. More clarity will be sought on that front from the upcoming earnings call.
    Share buyback and dividends?
    Apple generally raised its dividend in the January-March reporting season, which it has done so with a 4% increase to $0.24 per share this year. It also guided for a US$90 billion stock buyback then, which provides a vote of confidence for its cashflow over coming quarters. For the coming quarter, its free cashflow is expected to rise 5.9% from a year ago.
    Strong record of earnings outperformance, but forward guidance will be key
    Apple generally has a strong track record of beating earnings estimates. Since FY2018, it has only missed earnings estimate once out of the past 22 quarters. On a revenue basis, it has also outperformed on 20 out of the past 22 quarters since FY2018. Therefore, the odds seem to be heavily leaning towards another positive surprise at the upcoming results.
    That said, recent results from Netflix and Tesla will serve as a warning to market participants that forward guidance will be key as well, to validate broad expectations for a recovery in corporate earnings through the rest of the year.
    Source: Refinitiv  
    Technical analysis – Upward trend intact but near-term bearish RSI divergence on watch
    Apple’s share price has been on a tear, gaining as much as 60% year-to-date. While the series of higher highs and higher lows provide conviction of a clear upward trend in place, the recent tops are marked with a bearish divergence on its Relative Strength Index (RSI), which points towards some exhaustion in upward momentum. The recent formation of bearish shooting star candles on the daily chart also raises the odds of a near-term retracement.
    Nevertheless, any retracement could still leave a series of support lines on watch to resume its upward trend. This includes a key upward trendline, alongside its 20-day moving average (MA) in the near term. Perhaps a major level of support will be at the US$180.00 level, where the upper edge of its Ichimoku cloud zone coincides with a 23.6% Fibonacci retracement on its year-to-date rally.
    Source: IG charts

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