Tech’s trillion-dollar valuations are about to be tested by coronavirus-tainted earnings

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Amazon, Apple and Microsoft have maintained their 13-digit valuations, while Alphabet has fallen back amid concerns about ad-supported tech.

Only four U.S. companies have ever been valued at $1 trillion or more without adjusting for inflation, and all four will describe how their businesses have been weathering the COVID-19 pandemic in the coming week.

In all, 149 members of the S&P 500 index SPX, +1.39% are expected to report financial results in the week ahead—more than a third of those will arrive Thursday—as well as 12 Dow Jones Industrial Average DJIA, +1.10% components. Joining the tech giants will be high-profile companies like Facebook Inc. FB, +2.66% , Gilead Sciences Inc. GILD, +2.39% , Tesla Inc. TSLA, +2.76% and Boeing Co. BA, -6.

While 65% of those companies that had reported through Wednesday topped expectations, J.P. Morgan analyst Mislav Matejka said that would mark the lowest “beat” rate in at least 10 years. Typically, 75% of companies deliver better-than-anticipated results. Apple is banking on services growth as the pandemic crimps demand for consumer hardware. Investors may be willing to forgive Apple for a weak March quarter Thursday, but they’ll be highly focused on the smartphone giant’s recovery expectations.High hopes Gilead’s Thursday afternoon report is likely to be overshadowed by anything the company says about its remdesivir drug, which is the subject of several COVID-19 trials.

First-quarter numbers “will be essentially meaningless,” wrote Raymond James analyst John Freeman, since the COVID-19 crisis only began impacting results in March. Nonetheless, he’ll be looking for company commentary on capital spending, balance-sheet flexibility, and the possibility of shut-ins.

 

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Technical bubbles will be broken as 2000

Even if these tech stocks pull back they'll be bought so fast it's not funny! 😉

It's just a big baloon

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