Yahoo Finance What's in Store for These 4 Technology Stocks in Q1 Earnings?
The first-quarter 2024 earnings season is now mid-way, wherein 229 members of the S&P 500 index reported results as of Apr 26. Further, 78.2% of these members have topped earnings estimates, whereas 59.8% have surpassed the same for revenues. The total S&P 500 earnings are expected to rise 3.8% year over year on 3.9% higher revenues.
The technology sector remains in the limelight as its performance is crucial for the S&P 500 index. The tech-heavy ‘Magnificent 7’ companies (Apple, Meta Platforms, Alphabet, Microsoft, Tesla, NVIDIA and Amazon) currently account for 29.1% of the S&P 500 index’s total market capitalization.
Overall, the technology sector’s first-quarter 2024 earnings are expected to rise more than 27.1% year over year on 8.7% higher revenues.
What’s Driving Technology Stocks?
The solid adoption of artificial intelligence (AI), machine learning, Internet of Things (IoT), blockchain, Augmented Reality/Virtual Reality devices, 5G technology and quantum computing are expected to have continued aiding the performances of tech stocks in the quarter under review.
The growing proliferation of generative AI is likely to have been a major positive. Rising demand for generative AI chips required in Large Language Models is expected to have benefited the semiconductor industry, which forms the backbone of the tech sector.
The latest sales data from the Semiconductor Industry Association is a testament to the same. The global semiconductor sales increased 16.3% year over year in February 2024 to $46.2 billion.
Rising PC shipments and signs of improvement in memory spending, especially in NAND and DRAM, are likely to have contributed well.
Apart from this, ongoing transition to cloud-based model by businesses across the world is anticipated to have bolstered the performances of cloud computing players in the underlined sector. Increasing demand for data centers, driven by the need for increasing cloud capacity to support AI-related workloads, is anticipated to have acted as a tailwind.
However, a challenging geopolitical scenario due to escalating tensions between the United States and China, as well as Russia and Ukraine, is likely to have hurt the prospects of the technology stocks in the first quarter. High inflation and unfavorable currency fluctuations are anticipated to have been concerning.
Sneak Peek of a Few Upcoming Releases
Let us see how the following technology stocks are poised ahead of their first-quarter 2024 results, which are slated to be reported on May 1.
Garmin GRMN is expected to have gained from portfolio strength in the first quarter. Robust demand for cycling and wellness products, along with strong demand for running watches, is expected to have benefited the fitness segment. Further, newly launched products like the eTrex Solar and Descent G1 Solar Ocean Edition are likely to have bolstered the performance of the outdoor segment of the company.
The solid adoption of domain controllers, owing to its increased shipments to BMW, is expected to have driven Garmin’s momentum among auto OEMs. However, weakening demand in aftermarket categories is expected to have been a headwind. Rising macroeconomic uncertainties and inflationary pressure are likely to have been major concerns. (Read more: Garmin to Report Q1 Earnings: What's in the Cards?)
Notably, Garmin has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
For the first quarter, the Zacks Consensus Estimate for GRMN’s revenues is pegged at $1.24 billion, indicating a 7.9% increase from the year-ago quarter’s actual.
The consensus estimate for earnings is pegged at $1 per share, implying a year-over-year decline of 2%. The estimate has been unchanged over the past 30 days.
Garmin Ltd. Price and EPS Surprise
Garmin Ltd. price-eps-surprise | Garmin Ltd. Quote
Donnelley Financial Solutions DFIN is likely to have gained from strength in its software solutions portfolio. This is expected to have driven the improvement in the company’s recurring and reoccurring revenues in the first quarter. Growing momentum in its Venue dataroom product is anticipated to have contributed well. Increasing go-to-market investments and the expanding partner ecosystem of the company are expected to have been other positives.
Robust AD and Total Compliance Management, and ArcReporting products are likely to have driven Donnelley’s customer momentum in the quarter under review. However, the weakening momentum of its event-driven capital market transactional offering is likely to have been a concern. Also, macroeconomic headwinds and geopolitical uncertainties are expected to have been negatives.
Notably, Donnelley has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
For the first quarter, the Zacks Consensus Estimate for DFIN’s revenues is pegged at $214.1 million, indicating 7.8% growth from the year-ago quarter’s actual.
The consensus estimate for earnings is pegged at 82 cents per share, implying growth of 32.3% from the year-ago quarter’s actual. The estimate has been unchanged over the past 30 days.
Donnelley Financial Solutions Price and EPS Surprise
Donnelley Financial Solutions price-eps-surprise | Donnelley Financial Solutions Quote
Cognizant Technology Solutions’ CTSH robust generative AI capabilities, driven by growing investments to train thousands of its employees in generative AI, are expected to have been a key growth catalyst in the to-be-reported quarter. The company’s NextGen initiative is expected to have played a pivotal role in enhancing operational efficiency.
Additionally, CTSH’s expanding clientele on the back of large deal wins is likely to have contributed well to its quarterly performance. Its strengthening relationship with Alphabet’s Google Cloud is anticipated to have been a plus. The company’s growing footprint in the healthcare industry is expected to have been another positive.
However, a sluggish Financial Services segment and challenging macro environment are expected to have been concerning. (Read more: Cognizant to Report Q1 Earnings: What's in Store?)
Notably, Cognizant has an Earnings ESP of -1.71% and a Zacks Rank #4 (Sell) at present.
For the first quarter, the Zacks Consensus Estimate for CTSH’s revenues is pegged at $4.72 billion, indicating a 1.9% decrease from the year-ago quarter’s actual.
The consensus estimate for earnings is pegged at $1.11 per share, implying no change from the year-ago quarter’s actual. The estimate has been unchanged over the past 30 days.
Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant Technology Solutions Corporation price-eps-surprise | Cognizant Technology Solutions Corporation Quote
Generac Holdings GNRC is likely to have benefited from the strong momentum in home standby generators, along with growing sales in the residential energy technology products and solutions category. The growing adoption of Ecobee in the smart thermostat market, owing to the expansion of partnerships with important retail partners, is expected to have contributed well.
However, a slowdown in the shipments to certain direct telecom, rental and beyond standby customers is expected to have affected the performance of the Commercial & Industrial product line. Challenging macroeconomic conditions, stiff competition and increasing operating expenses are anticipated to have been headwinds for Generac. (Read more: Here's How Generac is Placed Ahead of Q1 Earnings)
Notably, GNRC currently has an Earnings ESP of -1.71% and a Zacks Rank #4.
For the first quarter, the Zacks Consensus Estimate for Generac’s revenues is pegged at $888.19 million, indicating 0.03% growth from the year-ago quarter’s actual.
The consensus estimate for earnings is pegged at 81 cents per share, implying growth of 28.6% from the year-ago quarter’s actual. The estimate has moved north by 6.6% over the past 30 days.
Generac Holdings Inc. Price and EPS Surprise
Generac Holdings Inc. price-eps-surprise | Generac Holdings Inc. Quote
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Garmin Ltd. (GRMN) : Free Stock Analysis Report
Cognizant Technology Solutions Corporation (CTSH) : Free Stock Analysis Report
Generac Holdings Inc. (GNRC) : Free Stock Analysis Report
Donnelley Financial Solutions (DFIN) : Free Stock Analysis Report
