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Big Tech stocks fall amid speculation of this week’s Fed decision

Stocks move lower ahead of Monday’s close as Nasdaq leaders trend into the red.

Video Transcript

DAVE BRIGGS: Tech earnings on tap this week. Meta, Apple, Amazon, Alphabet, just to name a few, all up between 9% and 16% this year, all reporting earnings this week. Overall, analysts are bullish on the tech sector despite recent headwinds, and Amazon has the highest percentage of buy ratings on the Street. Let's just start with a little Amazon talk.

Basically, nothing is out of their reach right now. It's still an AWS story, but they're into healthcare now. Streaming gets the most headlines, probably the slowest part of the story. Stock up-- down 32% in the last year, up 16%. A lot of upside ahead, not clear what to make of this week's earnings report.

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SEANA SMITH: It's not clear what to make of this week's earnings reports, especially after what we saw last week from Microsoft. One of the big worrisome headlines in that report from Microsoft was slowing growth going, looking ahead for its Azure business. So that placed a lot of questions, just in terms of what we could hear from Amazon for AWS. We know that's so important there to their business. So any guidance there, I think is really going to be key.

But it's interesting when you take a look at those analyst ratings with Amazon, the largest percentage of buy ratings here on the Street when it comes to some of those bigger tech name plays, clearly a huge focus will be on Amazon. Dave, I'm also closely watching Meta because we talked about the fact that Meta clearly one of the worst performers of the year, looking back to 2022. It's hard to really see that changing when you take a look at the fundamentals, at least, of their business outside just a pure valuation play at this point.

Clearly, a tough road ahead. Losses in their Reality Labs segment. That, of course, could actually exceed what they predicted, exceed that 4 billion number, so that, of course, will be a focal point here in this report and layoffs. We know layoffs is something we've heard from many of these companies, except for Apple. So we'll see whether or not that changes.

DAVE BRIGGS: No way. You think it will change?

SEANA SMITH: I don't think so.

DAVE BRIGGS: No way.

SEANA SMITH: Not right now.

DAVE BRIGGS: Tim Cook's not going to do it.

SEANA SMITH: I don't think we can count it out.

DAVE BRIGGS: Only increased headcount about 20% from pre-pandemic, so I guess I'm not ready for Tim Cook to declare layoffs are here. Yeah, Meta is the one that I still don't think they're through the woods yet, but you look back to November, the stock is up more than 60% since November 3. So investors feel otherwise. They're not through the Metaverse mess, right? They've still got some cost cutting, still probably some more layoffs.

Amazon, we showed that chart. 93% are bullish on it. How about an Alphabet real quickly? 92% of analysts are bullish on the case for Google parent Alphabet. And when it comes to them, two threats for me. AI, which, obviously, the Chat GPT threat, some have now suggested this is a major threat to search. We're not going to see that on the earnings report. We probably won't hear about that in the call. But the threat of AI and the threat of anti-tech antitrust regulation from the government, those are the two things weighing on Alphabet.

SEANA SMITH: Yeah, certainly, and massive challenges here for that tech giant ahead of these results. I think we might get a question or two from analysts about those things because, clearly, when you look at the forward-looking picture here with Google, with Alphabet, a lot of those question marks about the second half of 2023 into 2024 really weighs heavily on those two huge issues, Dave, that you just brought up.