AMD, Microsoft, and Google’s financial reports are coming. What important signals are revealed in the agency’s ratings

AMD, MSFT, and GOOG financial reports hit

Earnings Preview

Wall Street estimates AMD’s earnings per share will be 54 cents and revenue will be $3.62 billion. In comparison, earnings per share in the same period last year were 18 cents and revenue was $1.93 billion.

Aspect

Although 11 of the past 15 earnings reports have exceeded expectations in revenue and profits, AMD’s stock has not benefited from the company’s strong top and bottom line data. The investor and analyst community seem to take AMD’s growth story for granted. But will it be different this time? Bank of America analyst Vivek Arya listed AMD as the top three semiconductor company for long-term cloud-driven growth. He pointed out that the company has the ability to be “excellent in a slowing growth environment in large markets such as personal computers, automobiles, and automobiles.” AMD’s gross profit margin is also a key factor in its success and increase in cash flow. Assuming AMD’s gross profit margin continues to rise, relative to its growth opportunities, the stock appears to be severely undervalued. Considering that the company has consistently exceeded expectations and is ready to do so again, it would be a mistake to give up AMD stock.

The following are some of the latest institutional ratings compiled by the US Stock Research Agency

Citi analyst Christopher Danely raised AMD (AMD) from sell to neutral, with a target price of US$95, higher than US$17. Analysts’ channel surveys indicate that AMD’s share growth in the server market is “eventually accelerating,” especially in hyper-scale companies such as Amazon Web Services and Google. He expects this momentum to continue, and said that Intel’s (INTC) gross profit margin may drop to the 1940s, similar to the last AMD product cycle. Danely raised his estimate of AMD and recommended a paired transaction for increasing AMD holdings and reducing Intel holdings.

Bank of America analyst Vivek Arya pointed out that year-to-date, the PHLX Semiconductor Industry Index (SOX) has outperformed the S&P 500 at the midpoint of the year. In this case, five US semiconductor stocks that lag behind the SOX index are highlighted. He believes that “capture-based on the potential for improved prospects in the second half of 2021 and 2022”. AMD (AMD) is down 2% year-to-date compared to Intel (INTC), ARM is worried that Arya thinks it is “exaggerated”; Broadcom (AVGO) is lagging in terms of growth sustainability and software mergers and acquisitions; Teradyne (TER) is lagging behind Apple (AAPL) 5G digestion, the digestion “has been fully reflected”; due to concerns about cyclical growth, Analog Devices (ADI) has lagged; Arya told investors that Qorvo (QRVO) has fallen behind the volatility of smartphones. Arya has a buy rating on all five nominated “catch-up” candidates.

Piper Sandler analyst Harsh Kumar is confident in AMD’s growth momentum and competitive positioning. He continues to be optimistic about the company’s server and PC/laptop business, “in both areas there are AMD’s unique advantages.” Kumar told investors in a research report that although the stock has underperformed the semiconductor index by 18% so far this year, “we think the party is not even over, and it is a buyer at the current level.” He reiterated his increase in AMD. Hold the rating, with a target price of US$110.

Benchmark analyst Cody Acree assumes that AMD (AMD) coverage is a buy rating and a target price of $100. Acree told investors that Dr. Lisa Su and other members of the AMD management team developed a basic processor architecture that “has proven to be very competitive in the past few years and is generally superior to Intel (INTC)”. Acree added that Intel “has not managed the pace of its cutting-edge manufacturing technology” and “Intel is a bit handcuffed”, AMD has been able to take advantage of and gain extensive market share in the past few years.

Microsoft (MSFT)

Report after market close on Tuesday, July 27

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Wall Street expects Microsoft’s earnings per share to be $1.90 and revenues of $44.1 billion. In comparison, earnings per share in the same period last year were $1.46 and revenue was $38.03 billion.

Aspect

The trend of continuous work and study at home has promoted an increase in the demand for Microsoft services, especially in the field of smart cloud, which is expected to remain high. The strong outlook has brought a lot of bullish momentum to the stock, which has gained nearly 27% in the past six months. The company’s strong execution record is another reason for the increased confidence. Microsoft has surpassed its profit forecast for twelve quarters, and only one revenue forecast. Therefore, Wall Street remains generally optimistic about the company’s prospects for double-digit revenue growth in fiscal 2021, especially considering the strong growth rate of its Azure cloud platform, which is expected to surpass Amazon’s AWS in 2021. This raises the question, is all this good news priced? To maintain its gains, Microsoft must provide strong business unit performance on Tuesday and provide better-than-expected guidance.

As a fast-growing cloud platform, Azure will become the focus of investors’ attention, and product categories will become the largest revenue contributor; Azure revenue has soared by 50% in FQ3; analysts also believe that Teams has now joined other platforms for online learning and Work, this quarter may get higher motivation.

The following are some of the latest institutional ratings compiled by the US Stock Research Agency

Jefferies analyst Brent Thill raised Microsoft’s target stock price to $335, while maintaining a buy rating on the stock before the quarterly results are announced. Analysts believe that Microsoft’s performance so far this year is significantly better than the broader market. The software index rose by 30% and the software index rose by 15%, setting a higher threshold for stocks printed in the fourth quarter. Overall, Thill believes that the expectations for the fourth quarter are achievable, thanks to Microsoft’s diversified product portfolio, including Azure and Teams, which boosted sales.

Barclays analyst Raimo Lenschow raised the company’s target price for Microsoft from US$288 to US$325 and maintained an overweight rating on the stock. Analysts expect US Software’s second-quarter financial reporting season to be “positive”, saying that terminal demand continues to improve, and inspections show that pipeline visibility is improving in the second half of the year. Lenschow told investors in a research report that this will enable the management team to provide more optimistic comments on the guidance for the second half of the year and help drive the current “restoration to growth” momentum.

Bank of America analyst Brad Sills earlier raised the company’s target price for Microsoft from US$305 to US$325 and reiterated his buy rating on the stock. Analysts believe that the advantages of Azure and Office 365 are 2%-3% upside compared to the estimated revenue of $44.1B in the fourth quarter. Sills predicts that as workloads continue to migrate, Azure may continue to grow by 50%.

Cowen analyst J. Derrick Wood raised the company’s target price for Microsoft from US$295 to US$310, and maintained an outperform rating on the stock. The analyst believes that after his bullish survey and 3rd party data show that the growth of the IaaS market has accelerated, it may accelerate again.

KeyBanc analyst Michael Turits raised the company’s target price for Microsoft from US$305 to US$330 and maintained an overweight rating on the stock. The analyst cited the “strong” second-quarter security inspection and VAR/CIO survey results, indicating that Microsoft’s growing strategic importance, increased budget, strength as a security integrator, and CIO survey as a major public cloud provider Leading. Turitz believes that Microsoft’s 2021 revenue growth of more than 175 US dollars DD, free cash flow profit margin of more than 30%, which guarantees a premium of 25.3 times the forward free cash flow multiple of the Standard & Poor’s 500 Index.

Citi analyst Tyler Radke raised the company’s target price for Microsoft from $310 to $378 and maintained a buy rating on the stock. The analyst raised his expectations and maintained a positive view of Microsoft’s fourth-quarter earnings report. He predicts that due to the recovery of IT budgets, the expected increase in dealer growth, signs of re-accelerating consumption patterns, and a slight increase in the number of PCs compared to three months ago, he expects Microsoft’s fiscal year to have a “strong end” “. Radek told investors in a research report that “compared to the conservative guidance of simple comparison, the overall number setting looks attractive.”

Stifel analyst Brad Reback raised the company’s target price for Microsoft from US$285 to US$305, and maintained a buy rating on the stock before the company announced its fourth-quarter earnings on Tuesday, July 27. Given the continued strength of the company’s commercial business line, especially Office 365 Reback told investors that he expects Microsoft to “substantially exceed Wall Street’s expectations.” Reback added that he also believes that although it is more challenging, Microsoft is still expected to achieve a 10% lower revenue growth in FY22 and maintain its current gross profit margin, while providing an upside for current street-free cash flow estimates. space.

Alphabet (GOOG, GOOGL)

Report after market close on Tuesday, July 27

Earnings Preview

Wall Street expects Alphabet’s earnings per share to be 19.21 U.S. dollars and revenue of 56.02 billion U.S. dollars. In comparison, earnings per share in the same period last year were 10.13 U.S. dollars and revenue was 38.3 billion U.S. dollars.

Aspect

The share price of Alphabet, Google’s parent company, has risen 36% in six months and 47% year-to-date, while the S&P 500 has risen 16% and has outperformed its FAANG peers in the past six months. These gains are driven by the cyclical recovery of the tech giant’s advertising business. This was obvious last quarter, when the company’s revenue in the first quarter increased by 34%, which is impressive. The market appears to have repriced the stock in response to the company’s growth recovery. However, while increasing multiples seems reasonable, stocks are no longer cheap. In other words, Google’s recent upward trend in several online advertising verticals, especially in areas such as retail, financial services, and travel, is still a compelling reason to bet on higher prices. Not to mention the revenue the company has made in its cloud business.

Investors also need to pay attention: Google has faced the fourth federal and state lawsuits in the past year; cloud revenues may grow strongly during the pandemic as the use of online and cloud services accelerates; Thomas Kurian’s comments on expanding Google Cloud business Latest progress; revenue has more than doubled, and it is growing faster than the parent company.

The following are some of the latest institutional ratings compiled by the US Stock Research Agency

Jefferies analyst Brent Thill raised the company’s target price for Alphabet (GOOGL) from US$2,850 to US$2,950, and maintained a buy rating on the stock before the digital advertising group’s earnings season. Thill told investors that he expects revenue to exceed “full-scale”, but since his digital advertising peers have grown 27% so far this year, he prefers selectiveness and will own Facebook (FB) and Alphabet.

Credit Suisse analyst Stephen Ju raised the company’s target price for Alphabet from US$2,755 to US$3,350 and maintained his outperform rating on the stock. Given Google’s global footprint, Zhu told investors in a research report that almost all advertising industries are expected to exceed the company’s expectations for the second quarter of 2021.

Tigress Financial analyst Ivan Feinseth reiterated his strong buy rating on Alphabet and set a 12-month target price of US$3,185, which means a potential return of more than 30% compared to the current level. Feinseth told investors in a research report that the accelerated growth of online advertising and spending, as well as cloud growth and profit margin growth, will continue to drive stock prices to rise further. The analyst said that Alphabet continues to benefit from the continued long-term shift to digital advertising and online spending.

The article does not have investment advice, please make your own judgment.