Amazon.com Inc. $Amazon.com, Inc. AMZN$ is expected to report an 11% sales growth in the second quarter, driven by its cloud computing and advertising divisions. Wall Street will be closely monitoring whether the company's investments in artificial intelligence are enhancing Amazon Web Services, which accounts for the majority of its profits. Recently, investor skepticism has grown around the tech industry's significant AI investments, leading to declines in the shares of Alphabet Inc. and Microsoft Corp. after their latest earnings reports.

Meanwhile, Amazon is working to accelerate delivery times and is developing an online store for low-cost apparel and home goods to defend its core e-commerce business against competitors like Walmart Inc. and emerging Chinese companies like Temu. AMZN 12-month TP is at 223.89

Amazon Earnings Preview

• Revenue Growth: Amazon is expected to report 11.9% sales growth YoY in 2Q24, driven by its cloud computing and advertising businesses.
• Amazon Web Services (AWS): AWS remains a dominant player in cloud IaaS, holding a 47% global market share, and is expected to contribute significantly to Amazon's earnings.
• E-commerce Performance: The company is focused on speeding up delivery times and developing an online store for low-priced apparel and home goods to protect its core e-commerce business from competitors like Walmart and Chinese companies such as Temu.
• Earnings and Guidance: Revenue for 2Q is estimated at $148.78bn, with an EPS estimate of $1.02 and operating income of $13.5bn. For the 3Q, revenue is expected to be at $158.43bn, while the operating income stood at $15.66bn.
• Consensus TP: Based on Bloomberg estimates, the target price stood at $223.89. Amazon shares have risen more than 20% over the past year, outperforming the SPX Index, which is up 15.8% YTD.

Apple Inc. $Apple Inc. AAPL$ is set to announce its latest earnings on Thursday, which will likely include the first hints at the expected performance of the upcoming iPhone 16 in September. The fiscal third quarter, which ended in June, is anticipated to show a return to revenue growth, with analysts forecasting a 3% increase after five declines in the past six quarters.

However, investors will be more interested in the outlook for the coming months, as the iPhone 16 and new Apple Intelligence features are expected to drive demand, especially following a slowdown in smartphone sales, particularly in China. Although Apple no longer provides formal guidance, it usually hints at growth expectations for key product categories in the current quarter. Alongside the iPhone 16 and AI features, updated versions of the Apple Watch and AirPods are also expected to be released soon. Bloomberg 12 months for AAPL is at 228.41 USD.

Apple Earnings Preview

• Revenue Growth: Apple is expected to report a 3.3% revenue increase for the 3Q24, marking a return to growth after declines in five of the previous six quarters.
• Product Updates: Investors will be monitoring the upcoming iPhone 16 and new AI features, which will provide different growth opportunities. Besides, the updated Apple Watches and AirPods will be watched closely.
• Financial Estimates: Analysts estimate Apple’s revenue for the 3Q24 at $84.5bn, with iPhone revenue at $39.0bn and services revenue at $24.0bn. Meanwhile, EPS is expected to grow by 7.1% YoY to $1.35.
• Consensus TP: Based on Bloomberg estimates, the target price stood at $228.41. Apple shares have risen more than 15.3% over the past year, slightly underperforming the SPX Index, which is up 15.8% YTD.