We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Time to Buy Alphabet and Amazon Stock After Q1 Earnings
Read MoreHide Full Article
Technology conglomerates Alphabet (GOOGL - Free Report) ) and Amazon (AMZN - Free Report) ) haven’t seen the extensive rallies in their stocks like in years past but more upside may be ahead.
Let’s see why now may be a good time to buy these tech giants’ stocks after their first-quarter earnings last week.
Alphabet Q1 Review
Reporting Q1 earnings last Tuesday, Alphabet was able to put some of the fears that the company’s slower progress in ChatGPT would affect its search engine dominance. CEO Sundar Pichai stated the Search segment was performing well along with momentum in the Cloud segment.
This led to Q1 sales rising 3% from the prior year quarter at $58.06 billion which topped estimates by 1%.
On the bottom line, first-quarter earnings nicely beat estimates by 10% at $1.17 per share despite dipping -5% from Q1 2022. More importantly, Alphabet put an end to a string of four consecutive quarters in which the company missed its bottom-line expectations.
Image Source: Zacks Investment Research
Amazon Q1 Review
Amazon also had a solid first quarter after releasing its results last Thursday. The multi-operational behemoth expects slower cloud revenue growth at the moment but Amazon Web Services (AWS) sales were still up 16% YoY at $21.35 billion. Total sales for the quarter topped estimates by 2% at $127.35 billion and increased 9% from Q1 2022.
Earnings widely topped expectations by 47% at $0.31 per share compared to EPS estimates of $0.21. This was also a 47% increase from the prior year quarter with Q1 2022 earnings at $0.21 per share.
Image Source: Zacks Investment Research
Growth & Outlook
Alphabet and Amazon’s better-than-expected first-quarter results are reason to be optimistic about their outlooks and the possibility that operating conditions may begin to stabilize.
To that point, Alphabet earnings are now forecasted to climb 18% this year and jump another 16% in FY24 at $6.25 per share. Earnings estimate revisions have remained higher over the last 30 days and are nicely up over the last quarter.
On the top line, sales are projected to be up 6% in FY23 and rise another 10% in FY24 to $274.53 billion. Fiscal 2024 would represent 69% growth from pre-pandemic sales of $161.85 billion in 2019.
Image Source: Zacks Investment Research
Turning to Amazon, earnings are expected to continue to rebound and soar 117% in FY23 at $1.54 per share compared to EPS of $0.71 in 2022. Plus, FY24 EPS is forecasted to climb another 52% to $2.35 per share. Earnings estimates revisions have trended higher in the last week since Amazon’s Q1 report.
Sales are projected to rise 9% this year and jump another 12% in FY24 to $629.96 billion. Furthermore, fiscal 2024 would be a very stellar 124% increase from 2019 pre-pandemic sales of $280.52 billion.
Image Source: Zacks Investment Research
Takeaway
Simply put, Alphabet and Amazon’s first quarter reports started to reconfirm the tech giants anticipated annual growth and that inflationary concerns could potentially subside in the near future. Both tech giants currently land a Zacks Rank #2 (Buy) as higher earnings estimate revisions are also supportive of buying shares right now.
With Alphabet and Amazon stock both trading around $105 a share it’s starting to look more plausible that they will move closer to their Average Zacks Price Targets over the course of the year which are notably over $130 per share respectively.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Time to Buy Alphabet and Amazon Stock After Q1 Earnings
Technology conglomerates Alphabet (GOOGL - Free Report) ) and Amazon (AMZN - Free Report) ) haven’t seen the extensive rallies in their stocks like in years past but more upside may be ahead.
Let’s see why now may be a good time to buy these tech giants’ stocks after their first-quarter earnings last week.
Alphabet Q1 Review
Reporting Q1 earnings last Tuesday, Alphabet was able to put some of the fears that the company’s slower progress in ChatGPT would affect its search engine dominance. CEO Sundar Pichai stated the Search segment was performing well along with momentum in the Cloud segment.
This led to Q1 sales rising 3% from the prior year quarter at $58.06 billion which topped estimates by 1%.
On the bottom line, first-quarter earnings nicely beat estimates by 10% at $1.17 per share despite dipping -5% from Q1 2022. More importantly, Alphabet put an end to a string of four consecutive quarters in which the company missed its bottom-line expectations.
Image Source: Zacks Investment Research
Amazon Q1 Review
Amazon also had a solid first quarter after releasing its results last Thursday. The multi-operational behemoth expects slower cloud revenue growth at the moment but Amazon Web Services (AWS) sales were still up 16% YoY at $21.35 billion. Total sales for the quarter topped estimates by 2% at $127.35 billion and increased 9% from Q1 2022.
Earnings widely topped expectations by 47% at $0.31 per share compared to EPS estimates of $0.21. This was also a 47% increase from the prior year quarter with Q1 2022 earnings at $0.21 per share.
Image Source: Zacks Investment Research
Growth & Outlook
Alphabet and Amazon’s better-than-expected first-quarter results are reason to be optimistic about their outlooks and the possibility that operating conditions may begin to stabilize.
To that point, Alphabet earnings are now forecasted to climb 18% this year and jump another 16% in FY24 at $6.25 per share. Earnings estimate revisions have remained higher over the last 30 days and are nicely up over the last quarter.
On the top line, sales are projected to be up 6% in FY23 and rise another 10% in FY24 to $274.53 billion. Fiscal 2024 would represent 69% growth from pre-pandemic sales of $161.85 billion in 2019.
Image Source: Zacks Investment Research
Turning to Amazon, earnings are expected to continue to rebound and soar 117% in FY23 at $1.54 per share compared to EPS of $0.71 in 2022. Plus, FY24 EPS is forecasted to climb another 52% to $2.35 per share. Earnings estimates revisions have trended higher in the last week since Amazon’s Q1 report.
Sales are projected to rise 9% this year and jump another 12% in FY24 to $629.96 billion. Furthermore, fiscal 2024 would be a very stellar 124% increase from 2019 pre-pandemic sales of $280.52 billion.
Image Source: Zacks Investment Research
Takeaway
Simply put, Alphabet and Amazon’s first quarter reports started to reconfirm the tech giants anticipated annual growth and that inflationary concerns could potentially subside in the near future. Both tech giants currently land a Zacks Rank #2 (Buy) as higher earnings estimate revisions are also supportive of buying shares right now.
With Alphabet and Amazon stock both trading around $105 a share it’s starting to look more plausible that they will move closer to their Average Zacks Price Targets over the course of the year which are notably over $130 per share respectively.