Meta, Amazon, Apple Face AI ROI Test In Huge Earnings Week | IBD

Hey everyone and welcome to earnings cheat sheet for Friday, July 24th. It's Alexis Garcia and Ed Carson here and we'll be taking a look at some key upcoming earnings reports to help you prepare for the week ahead. And Ed, this is a big week. Uh what do you have on tap for us? >> Yeah, probably the biggest week. I felt this week was big, but this this coming week excited about it. [laughter] >> I am excited as an investor, as a news editor. I wish there was a little less news, but uh I'd like to take a look at Apple, Meta Platforms, and Amazon.com. >> All right. Well, let's start with Meta Platforms, which is scheduled to post Q2 earnings on Wednesday, July 29th. Earnings for the social media giant are projected to increase slightly by 1% to 719 per share. revenue is expected to climb 27% to $60.22 billion. And here's why we're watching Meta. Really, for all of these companies, it's going to be about capex, capex, and more capex. Uh the consensus seems to be that Meta and uh Amazon will probably raise their current 2026 estimates. Uh that was before Google raised. Uh but beyond that, Meta has a lot of AI strategy questions that Mark Zuckerberg could use the call uh to address uh Ed like is the cloud business happening and if so when and what initiatives are most important in the next year for monetizing AI investments and much like Google uh Meta is on track to double capex uh spending from 2025 numbers. Uh the guidance right now is in the$125 to $145 billion range. Uh but Ed, I think the question is no no longer how much Meta is spending, but you know, is that actually measurably boosting the bottom line? There's a lot of questions out there right now about this return on investment. >> Yeah. I mean, part of it is sort of like imagine that you make a lot of money at a job and then you lose all that money before you get home. I mean, do you really did you really make that much money? I mean, and that's sort of what's happening with some of these things. Like Google was cash flow negative. I mean, it generated tons of cash, but then it spent it all and then some. So, I mean, so these companies are able to finance for the most part their AI spending, but it's still even with these massive money spinners, they're they're spending it all. So, I think that's a real concerns. Can they grow enough and will they turn around? Yeah. if they do do their own cloud you know that because joining the other hyperscalers of Google, Amazon and Microsoft in terms of uh you know actually doing uh doing cloud business for third party that'll be interesting but it it'll be expensive and they'll have to do some catchup. There's a lot of big big competitors around them too. Yeah. So we'll just have to see. I mean all the you know these big some of these reports are are important because they matter for everything else because this is what might drive AI hardware stocks the chip stocks but it may not be good news for the hyperscalers themselves >> and let's take a look at the chart Ed because Meta is technically in consolidation with a 79625 buy point but Ed this is a really messy chart here um it seems like Meta's had a lot of trouble getting over the 700 level. It seems to just be trading uh bouncing around in that 700 to uh 540 range here. Uh it was holding the 21-day line, but now it's gapped down to its 50-day line. Um so give me some thoughts here, Ed. You know, this had done really well after the year of efficiency, uh but it's really come down here, uh trying to find its footing. I think one of the interesting things about the year of efficiency, you know, a lot of that was was them slashing capital spending because they were because people realized nobody wants to do meta. I mean, >> the metaverse was a huge bust. But if you went to a weekly chart, you say, "Oh, okay." They because they turned it around and advertising. There was other things going on. There was some revenue pickup and other things. It wasn't just them cutting. But, you know, that's a that's a reminder for folks. And looking at this weekly, the relative strength line has been lagging for quite a while now. I mean, this is not, you know, whereas Google, which tumbled today, but at least it had an uptrend and relative strength that was a little better, you know, not necessarily in the last few months, but there had been an uptrend. You know, even just a week ago, it was on the poised of being at a real buy point. Obviously, is not now, but Meta has not been that way. And so Meta has a lot of work and it also has a history of gapping down on earnings or gapping up on earnings and then giving up the gains in the last few quarters. So it hasn't been right track. It just seems like it needs to even if this does well. This seems like one of those classic examples of wide and loose messy base that investors might be better served waiting for than a tighter base next to it or above it, you know, to to enter because it's just so well where would you enter this and can you trust it? Yeah. just not not been good action for a while now. >> Yeah, hasn't really done much uh over the last 18 months or so, Ed. And uh you know, coming back to the daily chart here, we can see this some of the gap downs that you talked about last earnings gapped up uh earnings from a few quarters ago. So, um but really all over the place here. uh in terms of fundamentals at uh you know average composite rating uh EPS rating at a 91 uh but anything else uh jumping out to you in terms of meta's uh fundamental story >> I think one of the things obviously we care about is that the growth rates are supposed to slow down you know uh next year in terms of EPS and and remember EPS does not include capital spending so that's that's beyond so you need to see that earnings grow the money spinner to works because they're going to push it out the door uh so you know how can they how is that growth rate going to continue to finance that and then you know whatever they have to say so it's really the outlook in terms of what's the process for AI return of investment what's the outlook for EPS uh to justify the current expenditures >> all right well let's move on and take a look at Amazon which is expected to report Q2 results on Thursday July 30th earnings for the ecommerce/cloud Titan are expected to rise 8% to 182 2 per share. Revenue is projected to climb 17% to 196.71 billion. And here's why we're watching Amazon. Again, it's all about that capex. Uh Amazon needs to accelerate cloud growth again. The consensus has AWS growth at about 31.7% compared to 28.4% in Q1. Uh Prime Day was this quarter as well, so we could expect some commentary on e-commerce demand. Uh some analysts have concerns that moving Prime Day forward a month will cause a guidance disappointment for Q3. And again, Ed, uh that AWS segment so important here in Q1, uh revenue surge 28% year-over-year to around 37.6 billion. uh if AWS can demonstrate that it's able to um convert this generative AI demand into sustainable year-over-year growth like that, um do you think maybe that'll make it easier for the market to swallow the over $200 billion capex budget uh Amazon is putting forth? >> You would think so, but then again, Google Cloud accelerated its growth to 82%. Now obviously cloud it's it's a smaller portion of Google's revenue versus Amazon's but Google cloud 82% an enormous growth and huge acceleration AWS is not going to do that partly because it's just so much larger so but maybe it can grow but probably people are expecting that some that continued acceleration uh this one you know so that that's just the issue there and um you know on on going forward it's doing well there is the chip sales in addition you know that they sort of in-house stuff how is that going? Uh, you know, that that's that's another thing that's that's something that really helped them uh, you know, a few months ago. There's a lot of excitement about that. But, um, yeah, I think that you just need to see tremendous growth. And right now, markets are not really excited about the hyperscalers spending a lot of money, but I'm not sure what the alternative is. They're probably thinking if we don't spend this money, we're going to be left behind. And so, it's it's a tough it's a tough situation. uh you know who can actually monetize this well enough. >> And looking at Amazon's chart here uh in consolidation with a 27856 pivot point. Um another one here, Ed, it was trying to get above the 21-day line. It's gapped down to its 200 day line. Um hasn't really done much over the last 18 months. We see it tried to come out of a previous base here on uh April 24th. Uh it climbed a little bit based again. Uh but again, it's been a really tricky environment for AI names so far this year. >> Yeah. And this is again part of where that vibe shift comes in. It rallied in April, you know, heading into earnings in part because oh, we're talking about all this demand for our chips and then they raised spending. You know there back then I think people were excited about the companies raising AI spending because that shows how much opportunity there is. And I'm not saying that there isn't still that opportunity but now the shift is you're just flipping the coin. It's like well wait a second you're spending a lot of money aren't you? I mean you know that's and you're not getting a lot back in the near term. I mean I'm not seeing nothing but nothing compared to the investment. So again you might be saying the same things. I said this about Tesla and other things, but sometimes people the companies will say the same thing, but investors have a different mindset to it and it just is. And uh right now, you know, can you change that mindset? I I don't know. Maybe they'll say no. They'll I'm sure they'll say we're finding things. We're generating things. A AI is generating this growth uh long-term. Yeah. Weekly. Look at that. Look at the relative strength line. Actually, you have to go back if you scrunch it even more. I think it peaked back in in 2020. uh the relative strength line. So, this really hasn't made a whole lot of progress, you know, compared to things, you know, it's and recently it's slumped. It's it never really got to the highs from a year and a half ago. So, this has not been a this has not been a leader. It looked like it was trying to establish something back in April, but that quickly faded. Uh so again, Amazon matters more in terms of what it means for the rest of the market uh rather than as something that investors would be interested in. >> All right. Well, let's move on to Apple, which is also due on Thursday, July 30th. Uh the tech behemoth, which as you can tell, Ed, I'm looking for adjectives for the word giant here to describe these companies. Uh but the tech behemoth is expected to see fiscal Q3 earnings up 20% to 189 per share. Meanwhile, revenue is expected to rise 16% to $108.85 billion. And here's why we're watching Apple. Uh this will be Tim Cook's Swan Song earnings call. Um we'll want to see if he talks about any product price increases, uh possible demand destruction, memory chip pricing, and long-term contracts there. And Ed, it's kind of a tale of two strategies here. uh we have hyperscalers like Meta and Amazon who are pouring tens of billions of dollars into this aggressive uh data center capex but uh Apple's kind of taken the opposite path um only allocating a tiny fraction of revenue to uh AI infrastructure starting to see a lot more pieces out there thinking maybe Apple was right in its approach. Um, and I think investors will also want to see if this lower spending approach is really driving maybe some higher margins uh in terms of iPhone upgrades and subscription growth revenue. >> Yeah. And the growth rate has picked up for a while there. This was growing in the single digits on revenue and as low double digits on the EPS side, which is fine, but you know, at a pretty generous valuation, but it's picked up to about 20. It was 22% in the last quarter, supposed to be 20% this time or time. revenue growth is in the mid to high teens. You know, just a little better. Not amazing, but you know, a little better there. Uh, you know, we're going to get new iPhones later this year. So, we'll see how that goes. Uh, yeah. And again, it's a little bit like the the movie War Games where the where the computer goes, you know, the only winning move is not to play. I mean, maybe, maybe not. I mean, how much is it? It's like, oh, you know, yeah, they may have to pay Google, you know, $5 billion for Gemini to go into this. Like, all right, sure. Here's five billion. We'll take it. You know what? you know that as opposed to spending 300 billion to develop something similar. I don't know. Uh yeah. So it right now it's working up you know and uh that uh that's it's definitely the best best looking magnificent seven stock right now for sure. >> No. And we're on the chart here and we can see uh it's drifted off um some recent highs around a 431 level. ED uh you know had this breakout uh back here uh around May 7th uh it advanced it tested the 50-day line uh broke below it had this nice bounce um but yeah not too extended here Ed so so what's the move here with Apple >> yeah and actually on a weekly chart there is a base so you can see you know there's a short consolid consolidation on a daily chart you could have bought it off the 50-day line but it's right in the buy zone still. So, I mean, if it moves, you know, pauses here and then moves off earnings, doesn't get too extended, yeah, you could buy this. Again, the relative strength line on this name, not really that tremendous over time, but the growth rates are picking up and the relative strength line has kept pace. I mean, unlike, you know, if you go on to a monthly chart, it's vague, it's sort of gone online, but vaguely gone up over not much. And so it's nothing to write home about, but I mean the market's done pretty well over that time. So it hasn't been a lagard. It really hasn't been a leader, but I mean it is picking up. It's doing better. So yeah, uh you know, this is not going to be one that you would imagine would double or triple, but that's not the kind of market we're in. The stocks that are d that have doubled or tripled are not necessarily performing the best right now. >> Yeah. And those were um some of the big names on our radar. Uh but there's a lot of earnings coming in next week, Ed. uh another MAG 7 name Microsoft also reporting uh Microsoft not really in the conversation we can see with the chart not doing too well uh it's below all key moving averages uh but again important in terms of hyperscaler spend here so what are you looking at that's what I'm looking at I mean but this is the weakest of all of them really or at least it has been basically one day over the 200 day line in the past you know several months uh so not not acting well. Uh it's going to take a lot to turn that around. >> All right. Well, let's jump over to Seagate Technologies. We've been seeing all these memory chip stocks having incredible runs. Uh earnings there on July 28th. Uh this one trying to find some footing, Ed, after hitting highs around the 1145 level. It's come back above retaken the 21 and 50day lines. Uh so, what are you hoping to set up here? I mean, I'd love it to do nothing for the next several days, but honestly, if it weren't for the market being so wild and earnings coming up, you might think, "Ah, maybe I could take a chance on this one right now because it's mov. It's not it's steeper than you'd like, but uh it's making that nice move, but they're there." So, I mean, obviously the what the hyperscalers will influence all these AI hardware players, too, but Seagate's earnings, the hard drive maker, uh, big deal. just want I'd love it to stick around here and then move and maybe there being opportunity other than that maybe it moves up after earnings then bases forms some kind of handle or some such you know pauses but real encouraging heading into earnings that it's doing this >> all right how about we take a look at a memory another memory chip name uh the recent IPO SK highix here Ed um so yeah thoughts here it looks like it undercut uh some lows so what are you looking at >> so basically has an IPO Okay. So, it's a little weird because obviously not a startup. It trades in Korea. I'm not sure where. I mean, I I probably should look at its Korean chart to get a sense of things like is it above the 50-day line. It probably is doing something like that right now. Uh, you know, honestly, probably similarly, if it weren't for earnings, you could argue this is sort of a buying like an early entry. I mean, again, I' I'd love to see what it is in Korea. Uh, you know, because just to see that sense like is it moving above the 50-day line? But you just have to wait and see. But hugely important. And I will also note Samsung electronics which does not trade here but trades in CRA they already gave preliminary results but they'll also report next week. So huge week for memory even though you know you know beyond just these names. >> Yeah let's take a look at some more chips lamb research due on July 29th ed. Uh this one again had a really sharp pullback from that high of 43850. It's trading below the 50 and 21 day lines converging here. Um, so what are your thoughts here? >> I mean, it needs to get above the 50-day line right now. I'm more interested in what it means for other peers because there's a number that have retaken their 50-day lines. So, this is a bit of a lag here. Now, they could obviously recapture that pretty sharp drop to it. This has been strong. It's understandable it came down, but yeah, I want to get it above there, but it could also, this could also be something that triggers buy signals and stocks that had more, you know, orderly pullbacks. >> Yeah, let's take a look at ARM Holdings here, Ed. Another one here that uh has pulled back um from highs. It's again below uh the 50-day and 21day line. So, uh same thoughts here with ARM. >> Yeah. And I think if it got all the way above the 50-day line, that'd be a lot of work, you know, just to get back there, a lot of movement. So, I mean, I' I'd like to see it gap up, then pause, then move up, but this is one that's very volatile. I'm not a big fan. I think the ATR is has been extremely high on this name. Like, it's only 8.6, but it feels more. Uh, it is in the CPO space, CPU space. So, it'll be interesting to see what Intel has to say about it. So, it could move ahead of time, but I don't I don't think I don't think there'll be a very safe buying opportunity. Maybe in the long run, maybe people say, "Aha, you should have bought it." But this one was very volatile. All right. Well, let's continue in the AI space. Uh, Celestica due on July 27th. Uh, trying to hold at the 21day line, Ed, but has been in a downtrend after hitting a high of 47402. >> This is one reason why you have to balance. Do I hold for the long run or just get out and wait again? Because Solstica looked like a real leader for a few days as it moved out in the powering higher. But there are a few names like this and we'll look at another one where then they sold off and they're not leading the comeback, you know, and so, you know, sometimes you could sell and say, well, it's not just you can always get back into that name, but you could also get into another name, you know. So, uh, again, an important an important stock out there, but it doesn't seem like it really is in good shape, too wide and loose. >> Yeah, let's look at uh earnings there on July 29th. Uh, this one looking a little bit better again, holding at the 21day line. It's technically in a buy zone here, Ed. Uh but again, we've seen some uh pullback action. This one at least trying to rebound from that. Um so thoughts here. >> Yeah, I agree. It's it's it's been a little bit wide and loose heading in. It's a little bit better lately. It's um but we'll have to see what it looks like after earnings. Uh yeah. >> All right. Yeah. Let's look at uh Corning uh earnings there on July 28th. Uh this one trying to hold around the 160 level. It's beneath the 50 and 21 day lines, but another one that's had a pretty sharp pull back from highs here. >> Well, I think horning sort of hit a glass ceiling as it were. Um but uh you know, really powerful move, but then again, this is like Celestica just this one looked like this one was so strong, but then it gave up all those gains, came back up, and then broke hard again. This is just why, you know, you you have to watch over a lot of repair work. Yes. Could this run up again? I don't know. But it's it's going to look really odd and damaged. Uh it if this works, it seems like a lot of other stocks will work. Let's put it that way. Um you know, that might look a little bit cleaner. >> All right. How about a Bloom Energy earnings there on July 28th? Uh this one again, uh kind of trading between the 50 and 21 day line and its 200 day line. It's been in this downward sloping trend maybe trying to even out here. Uh the thoughts here. This is one that comes up a lot. Uh especially on IBD live. Um so what are you looking at? >> Yeah, I mean this one it's so hard to play because I don't think you want to buy breakouts for the most part because it swings up and down. So by the time it breaks out, you can see what happens. Needs repair work. I mean this one is just very volatile. Get above the 50-day line, maybe pause a little bit. You'd want to see but I don't know. I mean, I think there's been some concerns about this and that. So, could this go up 30%? Sure. But I I don't know. I mean, it's it's been very very volatile. All >> right. How about we look at Fortnet Ed? Uh earnings there on July 29th. Uh this has been on a monster tear. Um since this gap up back here on May 7th, uh went up 20%. It's been running since. Uh we do have kind of a sharp break below the 21day line. Um so what are your thoughts here in terms of you know one an entry and two if you're um in this maybe some time to take profits [snorts] >> you know if you bought it recently like off this recent shelf you know when it had this three or four weeks you've given up most of those gains so that that's tough heading into earnings you know that you know it probably would be I would be thinking about getting out or or or certainly pairing down my position as it's gone through that it but for those who bought the gap breakout on earnings last time, you know, that's a different position. You could choose to lighten up or not. I mean, that's uh this could provide a buying opportunity if it bounces off the 10-week line because you look at a weekly uh it's getting close to that and it's sort of close to that old shelf. So, this is an area where we'd like it to. This is the why cyber security took off. Okay. But software names are coming down. Software there there's just that concern about shifting away. It's not necessarily that AI is going to destroy software, but that companies are diverting all power to phasers, putting all their money into chips and, you know, memory and hardware rather than software. That's the concern now. I don't know if that's true or not, but this is a very important port for uh probably the strongest area of software that really stood out when a lot of software names are still stuck on the mat. >> Yeah. Let's uh take a look at a couple trucking names. Ed Warner Enterprises with earnings on July 28th. I'll switch back to the daily here. Uh this was in a buy zone. It's had a sharp downward reversal here on July 23rd. Uh now testing the 21-day line. Uh but was looking pretty good. Had this nice uptrend. Um so thoughts here, Ed? Obviously oil prices probably playing a large part in the recent move. Um but give me your uh take on wor. >> Yeah, I think that's what's finally hit. It was actually impressive that it did that, you know, that it held up um so well and actually broke out even when oil prices were rebounding, but finally it sometimes sometimes something like interest rates or oil prices won't hit won't hit and then finally and then finally and that seems to be hitting the truckers. Uh oil and diesel prices I think has risen even more because of Russia curtailing its exports because it can't make enough with all the refineries getting hit. So yeah, I mean we'll see. I mean this this was a strong space, but uh and there's probably people should keep an eye on this, but it's going to be hard unless oil prices uh come back down uh to to really see movement on this >> positive movement. >> Yeah, if it it if it can claw its way uh back above the buy point uh and the pressure on oil prices uh still of interest. >> Uh you know, I just be real cautious. just feel like the risk of a break like this would happen again. You know, it Brent crude is over a hundred. There's some psychological things that I think are hitting the market right now. It's like uh and it just seems like people and this is going to shift people to trains. I mean, companies will have a choice. Where do you ship your goods? Uh when fuel prices are high, it makes people want to go to rail because it's a lot cheaper. >> Yeah. Well, how about uh we take a look at another trucking name, ArcBest, due on July 29th. Uh another one here, Ed. Uh was looking pretty good. Uh it's had a little bit of a downside reversal today. Um it looks like maybe kind of a cup base, maybe this some sort of handle here. Uh what are your thoughts? >> Yeah, handle would be great. Again, I'd really like but the results will be important, but and but their commentary on for both of those companies on fuel costs and how they might mitigate it uh will be important. Maybe they'll be able to pass on higher costs. I don't know. domain. So, you could see a revival on that, but then if costs go even more, there's going to be a limit to what customers will pay. >> All right, how about some financials? Uh, Visa due on July 28th. This one in a buy zone ad. It's testing the 21day line, but again, another one uh it's had a little bit of a back and forth here uh after this breakout from a consolidation back on June 29th. Uh so, thoughts here? >> Yeah, payment stocks been very strong. These have not been leaders, but they've been doing fine. I mean, uh, but there I think there's this pressure now. Maybe concerns about oil prices and yields just sort of pressuring consumers maybe. Uh, so it's doing fine. It's in a buy zone. You could buy this, but it just doesn't seem like it's been I don't think the relative strength line over time has been particularly strong. You know, it it goes on many moves for a few months, but hasn't, but in the longer term, you can see there's a pretty strong downtrend there. Uh so you know it hasn't been a real can it can it sustain any kind of you know relative strength bounce. I I don't know if they can do that. >> Yeah. Let's look at Mastercard. Uh also has earnings on July 30th. This one in a cup base uh again has fallen off here uh in the last week or so. Ed it's now testing the 21day line below the 200 day line. uh but uh you know Visa definitely looks better but uh any thoughts on Mastercard and what we're looking at here? >> I agree they they that looks better. I mean look their growth rates are fine. They're solid. They they're these companies are very consistent on things. Uh so um and they don't have to worry about and Visa and Mastercard, you know, don't have to worry about balances because that's really on the car credit card companies. They make money on the fees on retailers and banks and stuff. Uh but yeah, this one is a lagard relative to even to Visa. >> Yeah, let's look at Robin Hood earnings on July 29th. Uh this one at uh getting back above the 200 day line, 21day line. Next stop, uh this was uh a big leader back in 2025. It's had started uh pulling back toward the end of the year. Uh but looks like it's trying to come back. Um obviously a big player in uh prediction markets, which is becoming really popular. So, uh, what are your thoughts here? >> Yeah, I was trying to set up around the 120 area, but it's really broken down over the last week or so. Uh, I was sort of looking like a handle of some sorts. I mean, it could get, if it gets back above that, I think that'd be interesting. It'll be Robin Hood's comments about Bitcoin, about prediction markets. It's big player there. Uh, a lot of things, I mean, uh, just brokerage stuff in general. Um, but yeah, uh, this one I think needs to get back above, uh, above that. And I mean there's a lot of factors that are behind like Bitcoin, other things need to bounce back more consistently as well. >> All right. Well, let's go ahead and wrap with a look at some oil names since we have Exxon reporting next week on July 31st. Uh this one in a nice uptrend here, Ed. It's getting closer to this 160 level. Um so again, technically in consolidation, 17641. Uh but also looks like it's getting back up to um some recent highs here around 163. So uh what's the move here? >> Yeah, I mean look, if oil prices keep going, I mean earnings reports often aren't that interesting because everybody knows what you know, you can sort of do the math on things, you know, like they probably are producing this much, they're probably doing this. Uh so it's just the price of oil and it's just sort of like it makes it hard to when to buy it because at any moment look if Trump says I reached a deal with Iran the price of oil could fall 20% over two or three days and Exxon will fall a similar amount and Exxon and Chevron will both fall a similar amount but rather strength they're bouncing now. So they have to I mean it's just I've always struggled to play them because of that um uh in that situation but they're on an uptrend for sure right now. Yeah. And then let's just go ahead and take a quick look at Chevron. Uh same story here. Uh in an uptrend uh again getting back around this 198 uh level here, Ed. So similar story. >> Similar story. And obviously they're not moving as much because there's oil and gas and natural gas is not as strong, but still big big moves. It just seems like it's just for something less risky. the the refiners or machinery, something that's tied to oil, but isn't going to go one for one, like isn't going to be this immediate rug pull that you could face. Uh, but you know, this run could go for quite a while. >> All right, Ed. Well, thanks so much for your insights today. We really appreciate it. >> Thank you. >> And if you want more market analysis, be sure to tune in to Stock Market Today that goes live after the closing bell. And thanks so much for watching. We'll see you right back here next week.