Alphabet Sets Positive Tone Ahead of Tech Earnings

Core Insights - The peak earnings season is commencing, with 7,600 companies, or 70% of the equity universe, expected to report in the next three weeks, focusing particularly on major tech firms known as the Magnificent 7 [1] Group 1: Company Performance - Tesla's share price has declined this year, attributed to ongoing boycotts and backlash against CEO Elon Musk, leading to a 40% year-over-year decline in earnings and a 9% drop in revenues [2][3] - Alphabet reported strong Q1 results, exceeding Wall Street estimates due to robust performance in search and advertising, with significant investments in AI tools paying off [3] - Intel also beat analyst estimates but provided weak forward guidance, with Q2 revenue expectations of $11.8 billion falling short of the$12.82 billion consensus, and EPS expectations flat compared to a consensus of $0.06 [3][5] Group 2: Market Trends - As of now, 36% of the S&P 500 has reported Q1 results, with a blended EPS growth rate of 10.1%, an increase from the previous week's 7.1% [3] - Only 73% of companies have surpassed EPS expectations this season, which is below the 5-year average of 77% and the 10-year average of 75% [3] Group 3: Upcoming Earnings - The upcoming week will see 180 S&P 500 companies report earnings, including key players from the Magnificent 7 such as Microsoft, Meta, Amazon, and Apple [4][5] - The peak earnings season is expected to continue until May 16, with over 2,000 reports anticipated each week, and May 8 predicted to be the most active day with 1,156 companies expected to report [8]