Tag: Apple Stock

Tech Titans’ Earnings on the Horizon: Market’s Moment of Truth

The stock market is about to face a big test.

Meta and Amazon, among other tech giants, are getting ready to share their earnings reports, and investors are holding their breath.

Especially after Tesla shares took a hit recently, showing that traders don’t take kindly to disappointing numbers.

The ‘Magnificent Seven’: Driving Force Behind S&P 500’s Climb

There’s a group of tech big shots called the ‘Magnificent Seven’ that has been driving the S&P 500’s climb this year.

Talking about Google’s parent Alphabet, Amazon, Apple, Meta Platforms (formerly Facebook), Microsoft, Nvidia, and Tesla.

They’re opening their financial quarters’ books soon, which will give everyone a better idea of whether the tech sector, and the wider market, still have some steam left.

So far this year, the S&P 500 has jumped 11%, thanks to dividends.

But without these seven tech champs, that growth would have been less than 1%.

That’s according to the number crunchers at S&P Dow Jones Indices.

Betting on Big Tech: A Look Back and Ahead

Now, betting on big tech has usually been a good move for U.S. investors, though it had its rough patches, like last year.

This year, the hype around artificial intelligence has gotten more people excited about tech shares again.

Plus, with the economy acting shaky, many are leaning towards the big, stable companies as a safer bet.

These tech companies are not just about potential growth anymore; they’re raking in big profits already.

In 2022, they made up 17% of the S&P 500’s earnings per share, and experts at Goldman Sachs Group think that number will jump to 24% by 2025.

Bryant VanCronkhite from Allspring Global Investments says, “The growth these companies show is super important. It helps people gauge how healthy the market is.”

The earnings report schedule is packed. Microsoft and Alphabet are up first, followed by Meta, and Amazon.

Apple and Nvidia will share their numbers the following week.

Some financial folks think that if the big tech companies report weak earnings, it might make investors second-guess the high prices they’re paying for stocks.

Tesla’s Slip: A Wake-Up Call for Tech Stocks?

The recent drop in Tesla’s stock price showed that the market is ready to give a cold shoulder to tech giants that don’t meet expectations.

Tesla shares dropped 9.3% after it missed sales and earnings targets. Plus, Tesla’s boss, Elon Musk, mentioned some snags in rolling out the much-awaited Cybertruck.

James Abate from Centre Asset Management points out, “When a big player like Tesla shows disappointing numbers, it can make investors nervous, affecting not just Tesla but the whole market’s value.”

Right now, the S&P 500 is trading at nearly 18 times its projected earnings, which is pretty normal compared to the last ten years.

However, with government bond yields rising to levels not seen in a long time, some investors are thinking stocks are pricey and are looking at bonds as a safer choice.

High Valuations: A Red Flag for Investors?

There’s also some legal drama in the tech world.

Last month, Amazon got slapped with a lawsuit from the Federal Trade Commission and 17 states, accusing it of using its big-footed monopoly power unfairly.

Meanwhile, Google is fighting off an antitrust case from the Justice Department, and Apple is dealing with business restrictions in China, a key market for them.

The ‘Magnificent Seven’ now make up 30% of the S&P 500’s market value, a jump from 22% last year.

This means if their share prices move up or down, they can swing the index too.

Many investors feel that these stocks are pricey compared to the companies’ earnings, which could set them up for a fall.

Carin Pai from Fiduciary Trust International warns, “These stocks are trading at high values.

If they don’t live up to the hype, that’s a big risk for the stock market.”

Final Thoughts

The upcoming earnings reports from big tech companies like Meta, Amazon, and others are a crucial moment for the stock market.

The performance of these tech giants, often termed as the ‘Magnificent Seven’, has been a significant driver for the S&P 500’s growth this year.

As these companies prepare to reveal their financial health, investors are on edge, especially after witnessing Tesla’s shares take a hit due to disappointing results.

The financial performances of these companies don’t just reflect on their individual stocks, but have a ripple effect across the market, potentially impacting investor confidence and stock valuations broadly.

With some legal challenges and economic uncertainties in the backdrop, and rising interest in alternative investments like government bonds, the stakes are high.

Moreover, the tech sector is under a microscope with high expectations around their growth, especially in the realm of artificial intelligence.

If these companies don’t meet the expectations set by investors and analysts, it could trigger a re-evaluation of stock prices not just in the tech sector, but across the board.

As the earnings reports unfold, they will not only unveil the financial performance of these companies but also provide a broader picture of market health and possibly dictate the market’s direction in the near term.

AMC Entertainment Gets $1bn Boost in Movie Titles from Apple

Market News Daily - AMC Entertainment gets a $1 billion boost in movie titles from Apple.
Market News Daily – AMC Entertainment gets a $1 billion boost in movie titles from Apple.

AMC Entertainment (NYSE:AMC) will finally get a boost in new movie titles as Apple prepares to spend $1 billion per year in theatrical releases.

CEO Adam Aron has said on a few occasions that AMC Entertainment’s potential is essentially capped by the number of titles being released each year.

AMC Entertainment is the largest movie theatre chain in the world.

It was able to survive the pandemic and remain the industry leader after millions of investors saved the company from bankruptcy when the company stock was purchased en masse to squeeze short sellers.

The company was able to raise billions of dollars and continues to raise hundreds of millions today as it makes way for profitability again.

Apple’s investment is part of the tech company’s efforts to raise its profile in Hollywood and lure subscribers to its streaming service, Apple TV+, Bloomberg reported, citing people familiar with the matter.

Apple has released films directly to its streaming platform or allowed limited runs in a small number of theaters for Academy Award eligibility.

The commitment to longer theatrical releases is a way for the company to appease talent, who want their projects on the big screen, and drum up awareness for its streaming platform, which is estimated to have between 20 million and 40 million users, much smaller than rivals Netflix and Disney +.

But Apple isn’t the only big company contributing to the movie theatre industry.

Amazon to Contribute $1bn Annually to Movie Theatre Industry

In November of 2022, Bloomberg reported that Amazon was also planning to invest $1 billion per year in the movie theatre industry, aiming to release anywhere between 12-15 movie titles per year.

That number of releases puts Amazon on par with major studios such as Paramount Pictures.

Now, Amazon Studios has its first-ever original movie debuting in theatres globally on April 5th, 2023.

AIR tells the story of the game-changing partnership between Nike and a then-rookie named Michael Jordan.

This is the largest commitment to the movie theatre industry by an internet company, says Bloomberg.

CNBC commented:

“While a $1 billion annual investment for film development is on the lower end of what major Hollywood studios spend each year, it’s a positive sign for the movie theater business, which has struggled in the wake of the pandemic.”

The Wall Street narrative that the movie theatres are dead no longer seem to hold weight.

And the rumors of Amazon going into the movie theatre industry are no longer rumors.

Apple joining the movie theatre industry seems to only reinforce and secure the future of AMC Entertainment.

Movie Theatres Are Essential for The Entertainment Industry

Market News Daily - AMC Entertainment to get a boost in movie titles from Apple.
Market News Daily – AMC Entertainment to get a boost in movie titles from Apple.

Big leaders in the entertainment industry have realized that they require the theatrical experience to grow their businesses.

There was an incident with Netflix where the company missed out on more than $200 million from taking Glass Onion: A Knives Out Mystery starring Daniel Craig out from the movie theatres too early.

The film earned $15 million at the box office but CNBC says the showing could have made $200 million if it had been kept in theatres longer.

Box office analysts say Glass Onion could have earned much higher earnings if Netflix had opted for a traditional wide release of 2,000 to 4,000 theaters.

CNBC stated, “Netflix has backtracked on its previous policies, including by introducing an ad-supported subscription option, leading many to wonder whether the company should rethink its resistance to the traditional Hollywood movie release model as it looks for new ways to grow revenue.

Amazon and Apple’s move to invest billions of dollars in the movie theatre industry is going to be a game changer for AMC Entertainment, as well as other cinemas in the industry.

But I’m curious to hear your thoughts on what’s happening today with AMC.

Leave a comment down below and share this story.

Market News Published Daily

Market News Today - AMC Entertainment to get a boost in movie titles from Apple.
Market News Today – AMC Entertainment gets a $1 billion boost in movie titles from Apple.

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