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Markets brace for avalanche of Big Tech earnings

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US earnings season will reach its peak next week as some of the world’s biggest tech company’s prepare to deliver quarterly earnings.

First up on Monday will be Tesla Inc (NASDAQ:TSLA), with the electric car maker coming off a strong 2020 that saw it turn a yearly profit for the first time and enter the S&P 500.

READ: Tesla boss Elon Musk counters police claims over ‘driverless’ car in Texas crash

However, the company and its billionaire boss Elon Musk will have little time to relax as the company looks to scale up and retain its profits amid increasing competition from both established automakers and other tech companies. The company is also currently embroiled in a PR storm after one of its Model S electric vehicles crashed into a tree and burst into flames in Texas, resulting in the death of two men inside, with local police saying no-one was found to be in the driver’s seat.

Investors will be keeping an eye on the company’s margins as it looks to lower prices and draw in more buyers. Outlook will also be crucial as Tesla seeks to maintain its sky-high valuation, which is mostly based on predictions of huge growth down the line.

Alphabet and Microsoft release numbers

Tuesday will bring results from Google parent company Alphabet Inc (NASDAQ:GOOG), with the company likely to look to reassure investors that it won’t take too much of a hit from a possible global tax of tech giants proposed by US president Joe Biden.

Also of interest will be the firm’s outlook statement amid an easing of lockdown restrictions, which will have the effect of allowing people outside again and by extension spending less time on the company’s websites such as YouTube, traffic on which helped it smash earnings expectations last year.

Also due on Tuesday are figures from computing giant Microsoft Corp (NASDAQ:MSFT), which is likely to be eyed for more cloud computing news as well as any commentary on which direction the company’s acquisition will take next.

Apple and Facebook to dominate mid-week

Wednesday will see momentum pick up, with results expected from both Apple Inc (NASDAQ:AAPL) and social network Facebook Inc (NASDAQ:FB).

Given Apple already announced a new suite of products on Tuesday, including new ranges of its iMac desktop computers and iPad tablets, investors may be looking for any details on the rollout of these new products or how the company expects to perform once they hit the market.

READ: Apple unveils new iMac and iPad Pro ranges in latest product launch

Meanwhile, iPhone sales will continue to be a key area of interest, as well as the company’s performance in the critical Chinese market.

More cautious investors may be keeping an eye on any comments about a global shortage of computer chips which could dent the firm’s production capacity.

Facebook has also been unveiling new products recently, notably a suite of audio features including ‘Live Audio Rooms’, audio-only group chats that many see as an effort to compete with audio-only chat app Clubhouse after it surged in popularity last year.

READ: Facebook unveils Clubhouse competitor in new suite of audio tools

Aside from any further product details, investors are likely to focus on the company’s key metrics of user growth and ad revenue, as well as how it hopes to deal with increasing pressure from national governments over fake news and its influence on society.

Late week delivery from Amazon

The final tech major to report in the week will be ecommerce giant Amazon Inc (NASDAQ:AMZN), the first results since founder Jeff Bezos stepped back from the CEO’s chair.

READ: Amazon to open its first and only hair salon in London

However, the change of leadership (if you can call it that with Bezos still serving as executive chairman) is unlikely to bring much change in company direction, while new lockdown measures in several countries are likely to have produced increased sales as consumers have found themselves shut out of the high street.

The accelerated shift towards digital services caused by the pandemic is also likely to benefit the firm going forward, particularly its Amazon Web Services cloud computing arm despite it facing stiff competition from both Microsoft and Alphabet.

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