Today’s episode of Full Court Finance at Zacks breaks down the market heading into the final week of July that will feature earnings reports from some of the biggest names in technology. The episode then dives into three of the standout stocks—Microsoft (MSFT), Apple (AAPL), and Meta Platform (META)—ahead of their financial releases to see if it might be time to start long-term positions in the stocks.
Wall Street didn’t react in any meaningful way to the hot June CPI print, which could mean the Fed’s ramped-up tightening efforts are more baked into stock prices than some might assume. The market will get some additional clarity on the Fed’s rate hike plans after its FOMC meeting ends on July 27.
The final week of July is also jam-packed with earnings reports from hundreds of companies. The list of stocks includes everyone from McDonald’s to GE and Pfizer. The stars of the show, however, will likely be the big tech stocks, given their huge impact on S&P 500 earnings and the major indexes.
The market has been mixed on the early reports from some tech stocks. Netflix and Tesla climbed on the back of slightly better than projected results that could showcase a willingness to nibble at some of these beaten-down names. But IBM fell as Wall Street assessed the impact the strong U.S. dollar will have on the company, and Snap’s disappointing quarter sent it tumbling over 35% on Friday.
The first name we explore is Microsoft
MSFT
ahead of its Q4 FY22 financial release on Tuesday, July 26. Microsoft already warned Wall Street that the strong U.S. dollar was poised to negatively impact its top and bottom lines.
Recent news that it is cutting open job postings highlights the pending economic slowdown.
Near-term worries and
Microsoft’s
downturn could offer an opportunity to start a position in the diversified technology powerhouse that completely recalibrated its long-term trajectory when it entered the now vital and massive cloud computing market. That said, it might be best to wait for its guidance and see how Wall Street reacts.
Apple Inc.
AAPL
reports its Q3 FY22 results on Thursday, July 28. AAPL has surged over 10% since mid-June as more investors start to scoop up the stock given its ability to constantly roll out offerings that its customer base seemingly must buy despite lower-priced competition. Crucially, Apple transformed far beyond an iPhone company and makes money from its 825 million paid subscriptions across nearly 2 billion active devices.
Last up is Facebook parent Meta Platforms
META
which releases its results on Wednesday, July 27. META has been hammered amid worries about Apple’s privacy changes, its metaverse bet, and more. The stock fell again on Friday following Snap’s disappointing showing and is down over 55% from its peaks. The fall, coupled with the fact that it is still a money printing machine, has it trading at a 30% discount to the Zacks Tech sector and 18% below the S&P 500 at 13.5X forward earnings.
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