Big Tech Q2 Earnings Outlook: What to expect this earnings season

Josh Warner
By :  ,  Market Analyst

When will Big Tech release earnings?

Video streaming giant Netflix will kick things off as usual on July 19, while the rest of Big Tech will follow in the last week of July. Find the key dates to watch below. Those marked with an asterisk are preliminary dates that are yet to be confirmed, meaning they could change.






July 26



July 28*



July 28



July 27



July 26



July 19

You can read our broader piece on what to expect this earnings season by reading our Q2 Earnings Outlook.


Big Tech Q2 earnings: What to expect this season

Big Tech has enjoyed collective success for many years, but there has been a greater divergence in performance in 2022. Some are proving more resilient than others, demonstrated by the revenue and earnings expectations for the upcoming quarterly results. Alphabet and Microsoft are set to shine, even if they too see a slowdown in growth, while Amazon and Apple are both expected to report lower earnings:

Quarterly Consensus

Revenue Growth

EPS Growth




















It is worth noting that many will be coming up against tough comparatives from last year, when Big Tech saw an explosion in earnings as demand for their products and services soared during the pandemic. However, that is not the only reason why the brakes have been put on growth this year. Rampant inflation, rising interest rates, supply chain disruption and the conflict in Ukraine have all weakened the growth outlook this year, and fears have also emerged that consumer spending will start to falter as the cost-of-living crisis starts to bite – putting us on course to enter a potential recession in 2022 or 2023.


Read more: Recession Stocks: How to invest during a recession

That could present new problems with demand, just as supply problems start to ease. We have already seen Meta and Netflix lose users this year. It could weaken demand for online advertising, which is monopolised by Alphabet and Meta. Demand for computers and other tech made by the likes of Apple and Microsoft could soften after experiencing a boom during the last two years. Amazon’s ecommerce business could suffer if people rein-in their spending. The potential impact of any downturn varies for each member of Big Tech but will hit each and every one of them. That has prompted markets to consider which members can weather any storm, and this earnings season will influence which stocks investors will back as we enter an uncertain second half.


Read more: Everything you need to know about earnings season


How is Big Tech faring ahead of this earnings season?

The wave of headwinds that have emerged this year means the first half of 2022 was the most tumultuous for stock markets in decades. The S&P 500 fell almost 20% and suffered its worst first-half performance since the 1970s, while the Dow Jones Industrial Average dropped over 14% and experienced its worst start to the year since 2002.

Tech stocks have led the charge lower as the growth outlook deteriorates and all of Big Tech underperformed the wider market in the first half of 2022. Still, the divergence has fed through to share prices and we have seen some perform better than others:


H1 2022 Performance














The tough environment has prompted markets to re-evaluate Big Tech, which saw valuations explode to unsustainable levels as they became standout performers during the pandemic. The selloff in 2022 means the majority of Big Tech is now trading at their lowest valuation multiples in years, and some now have far more reasonable valuations compared to what has been assigned over the last decade. This data was correct as of July 7, 2022: 


LTM P/E Ratio

5-Year Average

10-Year Average

























(Source: Bloomberg)


Read more: An introduction to financial ratio analysis and how to value a company

Still, Wall Street believes the selloff this year has been overdone and remains bullish on Big Tech as a whole. Brokers remain confident that Alphabet, Apple and Microsoft can swiftly recover over the next 12 months and achieve new all-time highs. They also see significant upside for Amazon, although believe it will struggle to return to the record highs seen last year, while Meta and Netflix have both been pegged at considerably lower valuations compared to their respective peaks following a tough first quarter – although markets still see potential upside in both stocks.


Broker Recommendation

Average Target Price



















(Source: Eikon)


Read more: How to buy and sell FAANG stocks



Wall Street forecasts Alphabet will report a 14.3% rise in revenue to $70.7 billion in the second quarter, with diluted EPS expected to rise 7.5% to $26.51.

Alphabet is expected to be the fastest-growing member of Big Tech this earnings season. The fact markets believe the company can deliver a 7.5% rise may look unimpressive at first, but this would be no small feat considering earnings almost trebled year-on-year in the second quarter of 2021.

The core Google business is reliant on ads and eyes are on how demand is shaping up given the uncertain economic outlook. However, its monopoly over search means it should prove more resilient versus other ad-reliant peers like Meta. It could also stand to benefit from a shift in spending away from social media platforms following the IDFA changes introduced by Apple last year, which has made it far more difficult for platforms to target consumers and track their online behaviour. YouTube could also benefit if more ad spending moves toward video-based platforms.

However, the driver of growth will continue to be Google Cloud. While Alphabet’s advertising business is exposed to any potential downturn, the cloud-computing division should keep powering ahead as investment in infrastructure should hold up even in the event of a downturn. The problem here is that Google Cloud is still way behind Microsoft and market-leader Amazon, and, unlike its rivals, the business is still burning through cash and in the red. This means Google Cloud will continue to bolster topline growth but remains a drag on the bottom, which is still ultimately reliant on advertising.

Don’t forget that Alphabet is set to complete its 20-for-1 stock split on July 15, when shares will begin trading on a split-adjusted basis. You can find out more by reading Everything You Need to Know About the Alphabet Stock Split.


Read more: What is a stock split and how do you trade one?



Amazon’s diversified business means it has levers to pull should any segment suffer in a downturn. Its ecommerce platform is vulnerable to any potential tightening in consumer spending, although this will be countered by its cloud-computing division Amazon Web Services (AWS) and other higher-margin activities like advertising. However, markets believe it will not be able to absorb rising costs and this will drag down profits this quarter and this year.

In fact, Amazon has warned that its bottom-line will come in between a $1.0 billion operating loss and a $3.0 billion profit. If it does sink into the red, then that would mark the first loss in over seven years – demonstrating the severity inflation is having on the company. However, markets remain confident it will remain in the black and report an operating profit of $1.7 billion, but that would still be over 77% lower than last year.

Wall Street forecasts revenue will rise 5.8% to $119.6 billion in the second quarter. That compares to Amazon’s 3% to 7% growth target. Diluted EPS is expected to drop over 77% to $0.17. Importantly, Amazon completed a 20-for-1 stock split in June, which means its EPS figures will be adjusted this quarter.


Read more: What you need to know about the Amazon stock split

The ecommerce business is already suffering from a slowdown in sales as the demand that exploded during lockdown continues to unwind. Like its rivals, it too is coming up against tough comparatives from last year. Importantly, the unit’s performance will also be impacted by Amazon’s decision to push its mega Prime Day sale into the third quarter this year, having held it in the second last year.

Notably, Amazon’s subscription business, underpinned by Prime, is expected to continue growing at double-digit rates despite evidence suggesting that subscriptions have been among the first things consumers have scaled back on as their budgets become stretched. That may reflect the variety offered by a Prime membership and also bodes well for the ecommerce and other parts of the business. Advertising, which remains a relatively small but fast-growing part of the business, is expected to grow over 16% in the second quarter.

AWS is forecast to grow revenue by almost 32% in the second quarter, which remains impressive even if it marks a slowdown compared to last year. It is important to remember that while ecommerce is the biggest revenue driver for Amazon, AWS is what makes profit and helps counter the losses made by other parts of the business. For example, AWS is anticipated to deliver an operating profit of $5.9 billion in the second quarter, but this will largely be swallowed up by losses elsewhere.



This could be a tough quarter for Apple. Wall Street forecasts revenue will rise 1.4% to $82.5 billion in the third quarter, with diluted EPS expected to drop 11.5% to $1.15. That would mark the first quarterly drop in earnings in almost two years as it comes up against tough comparatives from the year before, when EPS more than doubled because demand for tech exploded in lockdown.

However, Apple has proven it can provide a positive surprise and has continued to deliver record quarters this year, and some believe it will shine again this time around on the belief that Apple’s superior products are allowing it to navigate through a potential slowdown in demand for smartphones, computers and other devices better than its rivals.

The major headwind in the third quarter will have continued to be Covid-19 disruption in China and supply chain constraints, which it warned would cost it between $4 billion to $8 billion in sales during the period after admitting it is not immune from widespread problems hitting industries around the world.

Softer demand twinned with supply headwinds has led Wall Street to believe product sales – encompassing all of its devices – will drop 2.4% in the third quarter. That is expected to be driven by a 2.8% decline in iPhone sales and a 6.3% drop in demand for iPads, partly offset by a 5.8% rise in Mac sales and a tepid 0.5% uptick in sales of wearables and home accessories. Meanwhile, the higher-margin services unit – which is home to the likes of its App Store and video streaming service – is expected to keep powering ahead, albeit at a slower rate, with analysts pencilling-in 17.3% revenue growth this quarter.

Apple has not been providing forward guidance as usual since the pandemic hit, but markets believe Apple will once again start growing both its top-and-bottom lines in the fourth and final quarter of the year which, if achieved, puts the company on course to deliver a 7.7% rise in sales and a 9.1% lift in EPS over the full financial year.

Notably, with net cash standing at over $73 billion and Apple aiming to become cash neutral over time, the company’s EPS figures are likely to be bolstered through an acceleration in share buybacks, which help reduce the number of shares in issue to inflate the figure. That means shareholder returns look safe, having raised its dividend in the last quarter by 5% and increased its share buyback programme by a whopping $90 billion. That is a bumper increase considering it returned just over $88 billion in buybacks during 2021.



Meta shares have experienced one of the largest declines within the S&P 500 in 2022, after its share price fell off a cliff back in February when it revealed user numbers experienced its first sequential dip ever. The fact user numbers returned to growth in the last quarter has done nothing to allay the array of concerns that have hit sentiment toward the stock.

Rightly so, considering markets are expecting Meta to report yet another sequential drop in Facebook daily active users to 1.955 billion in the second quarter, down from the 1.96 billion reported in the first, although up 2.4% from the year before.

The trouble keeping users engaged also comes at a time when advertising prices are being knocked by other headwinds. The decision by Apple last year to introduce IDFA changes has been a major knock to Meta as well as other social media platforms. The change means it is more difficult for them to target ads and track people’s online behaviour, which has made their advertising businesses less efficient. This in turn is expected to continue to weigh on ad prices as more demand shifts to other forms of online advertising. The fact Meta has implemented the Reels video feature from Instagram to Facebook is also likely to hit pricing, considering shorter-form videos yield less than longer ones, while increased competition from the likes of TikTok is also playing its part. All in all, revenue per user is expected to decline 1.7% year-on-year in the quarter, led by declines in the US and Europe.

As a result, Wall Street forecasts revenue will rise by a tepid 0.3% to $29.2 billion in the second quarter, with diluted EPS expected to drop over 27% to $2.60 as margins are squeezed by rising costs. Total operating expenses this quarter are forecast to soar over 27% from the previous year to over $20 billion.

Markets are understandably nervous considering Meta is already struggling at a time when the economic outlook has deteriorated. With engagement looking like it has already hit its peak and a potential downturn threatening to see more businesses tighten their marketing budgets, the second half of 2022 could be even tougher for Meta.

For now, Meta is in a tight spot. The business is still ultimately driven by advertising, but Meta has banked that its future will be in the metaverse. The problem is that its new Reality Labs segment that homes its future ambitions is severely dragging down profit by billions of dollars at a time when its core advertising business is struggling to grow. Analysts believe Reality Labs will see revenue grow over 22% in the quarter but still drag down operating profits by $3.2 billion.



Wall Street forecasts Microsoft’s revenue will rise 14% to $52.6 billion in the fourth quarter, with diluted EPS expected to rise 6.3% to $2.31. If achieved, that puts Microsoft on course to deliver an 18.3% rise in annual revenue to $198.8 billion and a 19.3% increase to EPS to $9.51. Although all of Microsoft’s segments are expected to continue growing in the final quarter, they are all experiencing a slowdown, partly because of tough comparatives from the pandemic.

Microsoft’s largest sales driver comes from its cloud-computing business, which in turn is spearheaded by Azure. Analysts believe the division will see revenue grow 21.7% in the fourth quarter to $19.0 billion.

Its Productivity and Business Processes unit, which relates to the likes of its Office software and subscriptions, its Dynamics 365 solutions and its social media platform LinkedIn, is forecast to deliver 13.7% quarterly revenue growth.

More Personal Computing, which is responsible for selling Microsoft’s array of hardware from Xbox gaming consoles to Surface PCs, as well as licenses for its popular Windows operating system, is expected to have the toughest time and deliver topline growth of just 4.7%.

Although aspects of Microsoft’s business could suffer in the event of an economic downturn, analysts remain bullish that the majority is well-shielded as demand for vital products and services like Azure, Dynamics 365, Windows and its Office software should hold-up even if the environment deteriorates.

Plus, with the stock down heavily in 2022, Microsoft could bolster its EPS going forward by accelerating share buybacks in a similar fashion to Apple, with Microsoft boasting a cash balance of over $105 billion.

The outlook for the new financial year will be highly influential in deciding how markets react to the update. Wall Street’s current forecasts suggest Microsoft can deliver 14% revenue growth and a 9.8% lift in adjusted EPS in the first quarter, although they believe growth will slow over the full year and have pencilled-in 14.2% revenue growth and 12.5% growth in EPS in the 12 months to the end of June 2023.



Netflix shocked the markets when it revealed subscriber numbers fell for the first time in over a decade earlier this year. It lost 200,000 subscribers in the first quarter and this trend is set to continue in the second after Netflix warned it expected to shed another 2 million. That warning sent shares into freefall earlier this year. With the stock down over 69% since the start of 2022, it has been the worst performer in the entire S&P 500 this year.

Wall Street forecasts revenue will rise 9.6% to just over $8.0 billion in the second quarter, just shy of the 10% targeted by the company as price hikes help bolster its topline despite it bleeding subscribers, with diluted EPS expected to fall 1.1% to $2.94.

The withdrawal from Russia was the main driver of the decline in user numbers in the first quarter. In fact, subscribers would have grown in the period if it wasn’t for the loss of 700,000 subscribers in the country. However, the weak outlook for the second quarter shows that bigger headwinds are at play. Pandemic-induced demand is unwinding, increased competition is starting to take its toll, and price hikes are contributing to the loss of subscribers – all of which could be exacerbated as the cost-of-living crisis starts to stretch people’s budgets.

That has put pressure on Netflix to crackdown on account sharing, with up to 100 million households accessing Netflix by using somebody else’s account, as well as contemplate launching a cheaper, ad-supported version of its service in an effort to revive growth. While Netflix is also slowly exploring opportunities in the video game space, the company has a major job to do in convincing shareholders it can find new catalysts.

While 2022 is set to be one of the toughest years for Netflix, the company has said it can deliver an operating margin of 19% to 20% and continue to generate cashflow over the full year.


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