Weekly Equities Outlook: Magnificent 7 earnings: Microsoft, Apple, Alphabet

Microsoft Q1 earnings preview

Microsoft will report Q1 results on Wednesday, October 29, after the market close, with EPS expected at $3.66 and 11% YoY revenue growth to $74.96 billion—a 14.3% increase. The results come as the share price trades up 23% year to date, outperforming the broader market.

The clouds division remains a star of the show. Microsoft Azure cloud computing business is expected to post 38% revenue growth as cloud adoption remains strong. The tech giant has beaten earnings estimates for the past eight straight quarters, delivering consistent outperformance that has boosted confidence in the stock.

AI spending will be a key theme, with Microsoft's capital expenditure soaring as the company builds its AI infrastructure. Investors will be keen to understand how these investments will generate returns and when those returns will be realized.

 In recent months, Microsoft has signed over $23 billion in new contracts, suggesting strong enterprise demand for Microsoft cloud and AI services.

How to trade MSFT earnings?

MSFT rallied to a record high of 254 in July before easing back—the price trades above the rising trendline and its 50 SMA.

Buyers will need to rise above 531, the October high, to extend gains towards 554 and fresh record highs.

Support is seen at 511, the 50 SMA, below here 495, the September low comes into focus.

 

Apple Q4 earnings preview

Apple will deliver its fiscal fourth-quarter earnings after the close on Thursday, with consensus estimates for EPS of $1.77, up 8% year over year, and revenue of $102 billion, up 7.5%. The quarter includes the first few weeks of iPhone 17 sales.

As a reminder, Q3 numbers were still impressive, with EPS of $1.77 on revenue of $94 billion, versus the $1.43 forecast on revenue of $89.22 billion.

The earnings come as Apple was the second-worst-performing Magnificent Seven stock so far this year. However, the successful launch of the iPhone 17, which is outselling the iPhone 16 by over 10% has lifted the stock towards record highs this week, and it's now the top of the magnificent 7. The new smartphones have prompted an upgrade frenzy.

Tariffs remain a concern. CEO Tim Cook warned in the Q3 earnings call that tariffs could add $1.1 billion to costs in Q4. Cook is trying to balance keeping Trump on side with China manufacturing.

Any insight into AI investment will be watched carefully as the tech giant plays catch-up in the AI race.

How to trade AAPL earnings?

Apple broke out above its falling trendline and powered higher in an ascending channel. The price reached a record high of 265. Buyers will look to extend the bullish run towards 270 and 280, which would mark the next logical targets ahead of 300.

Support can be seen at 250, the lower band of the rising channel. Below here 244, the October low and 50 SMA are in focus.  Below here, 225, the longer-term rising trendline support comes into play.

 

Alphabet Q3 earnings preview

Google parent Alphabet will report late on October 29, after the market close, as the stock trades at record highs. Expectations are for Q3 EPS to rise 8% to $2.28, with revenue jumping 13% $99.9 billion. Should Alphabet beat expectations, it could take $100 billion in revenue for the first time.

The key focus will be the impact of generative AI on the search advertising business, which remains a key issue. Google began deploying AI overviews in the US from mid-2024 with conversational summaries and talking links for many search queries.

The cloud business will be very much in focus with expectations for 29% revenue growth.

The earnings come just days after Alphabet’s Google struck a deal worth tens of billions of dollars with safety and research company, Anthropic. The partnership could see Google Cloud supply up to 1 million of its AI chips, helping expand the startup's computing resources.

This past week, Google also said it made a breakthrough in quantum computing using its Willow quantum chip. The company said it develops an algorithm called quantum echoes that runs around 13 times faster on Willow than the classical algorithm of one of the world's fastest supercomputers.

How to trade GOOGL earnings?

Alphabet shares have been trending higher throughout the year. The price jumped after Q2 earnings, rallying to a record high of 261 on Friday. Buyers will look to extend the bullish move towards 280 and 300.

Support is seen at 235, the October low, and below at 225, the gap-up from Q2 earnings.