The six largest companies in the S&P 500 index SPX, +1.09% will report earnings in the week ahead, as about a third of the index reveals first-quarter numbers. Strong performances by the tech giants helped offset weaker performance by many other sectors earlier in the COVID-19 pandemic, and investors will get a sense of whether that momentum can continue as the world begins to reopen.
Alphabet seems to be showing “sustained strength in the cloud,” wrote Jefferies analyst Brent Thill, who expects that part of the business to benefit from “pent-up demand” as the year goes on. He also anticipates an acceleration in ad momentum.Another take on the ad landscape will come from Facebook Inc. FB, +1.55% on Wednesday afternoon, following Snap Inc.’s SNAP, +7.45% report that showed healthy advertising spending.
Thinking about the first quarter, he expects the company to benefit from continued strength in e-commerce and the arrival of stimulus checks. Shmulik ultimately expects an “acceleration in workload migration” for Amazon’s cloud business as workers return to office life, but he admits that may take a few quarters to pan out.Tesla and the tech titans are among 177 members of the S&P 500 that are set to report in the week ahead. The slate also includes 10 Dow Jones Industrial Average DJIA, +0.
Even more tech While the five largest tech companies report this week, there are plenty of other tech stalwarts lined up to report. Some elements of Snap’s recent report bode well for Pinterest, according to Wedbush analyst Ygal Arounian, who cited strength in categories like retail, e-commerce and packaged goods that are important categories for Pinterest as well. While the reopening seems to be helping Snap’s user-engagement trends, it might hurt Pinterest’s, he cautioned.