Nasdaq 100 outlook: Big Tech Q3 earnings preview

Josh Warner
By :  ,  Former Market Analyst

Key takeaways

  • Big Tech is forecast to grow earnings this quarter, although some much faster than others
  • Group could outperform wider market this season and help provide support to indices
  • Valuations have tempered since last earnings season, with most now trading at a discount to Nasdaq 100
  • Microsoft’s diverse business model and early AI leadership is supporting premium valuation over rivals
  • Alphabet’s ad pricing in search and YouTube recovering faster than social media rivals
  • Meta’s platforms going strong, but pressure is increasing to monetise array of new avenues and products
  • Trends improving across the board for Amazon, from ecommerce to cloud computing
  • Markets more cautious over Apple’s outlook, with outlook dependent on success of new iPhone 15, recovery in hardware demand and continued services growth


Big Tech earnings calendar

The earnings season has already kicked-off and some of the largest publicly-listed companies in the world are due to report soon. Here is when five of the Big Tech giants will report their next set of results:



Reporting date



Tuesday October 24



Tuesday October 24



Wednesday October 25



Thursday October 26



Thursday November 2


Big Tech earnings consensus

All five companies are expected to grow their headline earnings this season, but we can see that some will grow much faster than others.

Below is an outline of Wall Street earnings forecasts for each Big Tech stock, according to a consensus compiled by Bloomberg:


Headline EPS Estimate

Year-ago result

% Change





















(Source: Bloomberg, as of October 17)

Big Tech earnings preview

This is expected to be the first quarter of earnings growth from the S&P 500 in a year, according to FactSet. The initial results have only delivered mild growth so far, but the bulk of updates are yet to come. FactSet estimates that the S&P 500 could grow earnings by anywhere between 1.3% to 7.0% this season based on the average outperformance versus estimates. The low-end is based on the average performance over the last year and the top over the past decade.

With that in mind, it would appear Big Tech stocks are set to outperform once again this earnings season by delivering faster bottom-line growth, buoyed by cost-cutting efforts, resilient growth and new AI prospects. It is unsurprising that all the Big Tech stocks are therefore trading at a premium to the S&P 500, although some are trading at a discount to the tech-heavy Nasdaq 100. With that in mind, there is a chance that Big Tech could outperform and help prop-up indices this season, although the uncertain economic outlook does pose a threat going forward.

Let’s have a look at what to expect from the five Big Tech behemoths this earnings season…


MSFT stock: Microsoft Q3 earnings preview

Microsoft continues to trade at a premium over its Big Tech rivals after the pullback we have seen in recent months, with markets remaining more confident that its diverse business underpinned by a blend of software, hardware and cloud-computing can continue to deliver in tough conditions.

Demand for consumer electronics remains depressed and sales from its More Personal Computing division that sells computers, Xbox games consoles and its Windows operating system have been falling for over a year now. This trend is expected to continue, with analysts pencilling-in a 3.3% drop this quarter.

However, diversification is paying-off for Microsoft. This has been countered by more resilient demand for its software such as its Office suite of products and its jobs-based social media platform LinkedIn. Revenue growth has been accelerating here and analysts see the topline growing by over 11% this quarter.

Meanwhile, growth at Intelligent Cloud has slowed compared to last year but remains in double-digits, with Wall Street forecasting a 16% rise in revenue this quarter. Azure will be the most closely-watched segment considering it is growing at a faster pace, with analysts expecting a 27% rise in revenue this quarter, and it sits at the heart of Microsoft’s big push into AI using its relationship with OpenAI, which uses Azure as the backbone to run systems like ChatGPT. The outlook for Azure, cloud computing and AI will be key in deciding sentiment.

That growth, twinned with better margins, will allow Microsoft to grow its bottom-line faster than the top this season. However, Wall Street thinks margins will come under pressure in the coming quarters as it ramps-up investment in generative AI. Microsoft could surprise here if it is able to counter higher investment with lower costs.


GOOGL stock: Alphabet Q3 earnings preview

Revenue growth is expected to accelerate for a third consecutive quarter, this time by 9.2% to $75.46 billion. Alphabet, unlike its rivals, managed to keep growing its topline despite the softness in the advertising market thanks to its dominance in search, and YouTube is also making a comeback after coming under strain over the past year.

Google Cloud remains key. Revenue is forecast to grow 25% this quarter as it tries to gain ground on rivals Amazon and Microsoft, and it is set to report its third consecutive quarter of operating profits.

Alphabet’s quarterly earnings will grow at a faster pace than revenue thanks to the addition of profits from Google Cloud and higher and a rebound in ad prices, which has recovered faster compared to its social media rivals.

Markets have warmed to Alphabet’s AI prospects and are not as fearful (although still concerned) about the threat posed by the technology to Google, but it still hasn’t convinced investors that it is leading in the race given its underperformance relative to the likes of Microsoft and the challenge being posed by OpenAI’s ChatGPT. However, Google Cloud is making huge progress and much quicker than anyone thought thanks to AI tailwinds.

Recent promotions suggest Alphabet is making a big push to revive its fortunes in the smartphone market by infusing its Pixel with its new AI tools. Other members of Big Tech may be eyeing its monopoly over search, but Alphabet is showing a willingness to make big bets against rivals in hard-to-break markets.


META stock: Meta Q3 earnings preview

Meta has got markets excited with the launch of several new products in recent months, from the new Quest 3 headset and augmented reality Ray-Ban glasses to its new chatbots and AI products driven by its Llama large language model.

Meta has shown its willingness to fully lean into new tech, but the disappointing and very costly entry into the Metaverse and a lacklustre take-off of Threads are examples that highlight it has not executed particularly well on some fronts and that it will have to work even harder to deliver its variety of new initiatives.

That will keep eyes on its Reality Labs unit that homes its activities outside of social media as it keeps burning through cash. Analysts forecast Reality Labs will report a $3.9 billion loss this quarter.

Fortunately, Meta is countering these losses with faster profit growth from its core social media apps, as well as ongoing cost-cutting efforts including a near 20% reduction in headcount over the past year. That is taking some of the pressure off its efforts to monetise new avenues, especially as investment will continue to ramp-up. Advertising revenue is now recovering and improving impressions, driven by its shift to Reels, is helping it attract more marketing dollars even if pricing remains weaker. Ad prices are expected to be down about 5.8% from last year but that would mark a huge improvement from what we have seen in recent quarters. Any beat here would install confidence that the ad market has bottomed-out and position Meta for a strong rebound in 2024, assuming economic conditions allow it.


AMZN stock: Amazon Q3 earnings preview

Amazon should deliver broad-based growth this earnings season, with signs that trends are improving.

AWS, which generates the bulk of Amazon’s profits, is expected to keep topline growth broadly flat from the previous quarter at 12.7%, suggesting we could be seeing some stabilisation after 18 months of the brakes coming down, with hopes this will begin to accelerate again in the coming quarters, potentially helped by increasing AI demand.

Ecommerce is also recovering, driven by strong double-digit growth in third-party sales. We should also get an idea of the success of its Prime Day sales event that was held earlier this month, which could influence estimates for ecommerce in the fourth quarter, when markets are hoping for another acceleration in sales. The growth delivered from its subscription services has sped-up over the past year to suggest consumers are still seeing value in subs like Prime.

Advertising should also remain strong in a fragile environment, with forecasts pointing toward 21% revenue growth. That would outpace larger rivals to suggest Amazon is gaining ground on dominant players like Meta and Google, albeit with a long way to go before catching up.

The forecasted surge in earnings will be down to weak comparatives from last year, twinned with better margins as costs are now growing at a slower pace than revenue.


AAPL stock: Apple Q4 earnings preview

Apple beat expectations in the last quarter but shares have lost 7% since then as markets have become more concerned with the outlook.

Apple has already warned that revenue will be down for a fourth consecutive quarter in the final three months of its financial year, with analysts anticipating a 1% drop to $89.27 billion. Sales of its flagship iPhone, which accounts for about half of its revenue, are predicted to rise 2.3% from last year and services growth is accelerating, but that will not be enough to counter the ongoing weakness in demand for iPads, Macs and wearables.

The iPhone 15 only hit the shelves in September, so this quarter will only reflect a couple of weeks of sales. Still, a beat on iPhone sales would help install confidence that the model has been well-received, but the first real test will be in the final three months of 2023 covering the busy holiday shopping season.

There will be a lot of attention on China amid fears that consumers are switching away from Apple products due to increased political pressure on foreign companies, and turning to domestic rivals like Huawei. Sentiment was recently rattled by reports that iPhone 15 sales in China are down about 4.5% over their first 17 days of release compared to its predecessor the year before, according to research from Counterpoint Research and published by Bloomberg, putting it on course to see the worst debut of an iPhone in the country since 2018. That report came on the same day that Jefferies warned it thinks sales are down at a much sharper double-digit percentage because of the success of Chinese rival Huawei’s new Mate 60 Pro, which it believes has allowed the Chinese firm to leapfrog Apple and take the top spot in the market.

Apple has not been providing formal guidance for years, citing uncertain conditions, but investors will keep an eye on commentary on what to expect in the new financial year. Wall Street is expecting revenue to start growing again in the first quarter, driven by the iPhone 15 and a turnaround in Mac and wearables, and helped by easier comparatives. The smartphone and the broader electronics market is showing signs that it is hitting a bottom and that consumers will start upgrading their tech bought during the pandemic, but markets are still waiting for confirmation and wary of the threat posed by the uncertain economic outlook and a slowdown in consumer spending.


Big Tech stocks: Where’s the value?

There is a big divergence in valuations of Big Tech stocks heading into this earnings season. Here is how each stock is valued on a blended-forward price-to-earnings ratio based on estimates over the next 12 months:


Blended-Forward Price-to-Earnings Ratio







Nasdaq 100






(Source: Bloomberg, as of October 17)

Advertising behemoths Meta and Alphabet have been outperforming the group in recent weeks, having both recently hit their highest levels in over a year, because they have been trading at a hefty discount to the broader market. Meta and Alphabet are two of the largest players in the ad market and their scale and dominance means they have continued to grow despite softer conditions and analysts are hopeful that the worst is behind them.

Apple was trading at a premium ahead of the last earnings season but is now trading at a discount to the Nasdaq 100 as markets become more concerned with the growth outlook. Microsoft has managed to retain its premium thanks to its diverse business and AI prospects.

Amazon also trades at a premium, although the company’s valuation is more underpinned by growth prospects rather than earnings. With that in mind, Amazon trades at a bout 2.3x annual sales.


Nasdaq 100 forecast: Where next?

The five Big Tech giants currently carry a weighting of over 36% of the Nasdaq 100. This large weighting, and their dominance and scale, means they will be highly influential over the index and the broader market this earnings season.

The Nasdaq 100 continues to ping between a narrowing wedge, which is increasing the chance that we could see a major breakout ahead of the peak of earnings season. We can see that the index was contained between the 20-day and 100-day moving averages yesterday, although signs are not strong enough to suggest this will last.

As a result, the two major overriding trendlines remain firmly in play. We can see the falling trendline that can be traced back to the peaks we saw in July has been unshaken despite being tested four times in as many months. Assuming it can break above the 100-day moving average, all eyes are on whether it can push above the trendline, which would require a move above the 15,300 mark.

The rising and supportive trendline has been in play much longer, since the index bottomed-out in late 2022. This was out of action during most of the rally we have seen this year but it has come back into play over the past three weeks. The index tested this trendline four times in the seven sessions to October 6. Assuming the 20-day moving average doesn’t hold, eyes are on whether it will sink below the trendline, which would require a break below around 14,750. We could see the support zone that proved reliable in recent months come back onto the radar and set a new floor at around 14,500.

Will Big Tech earnings lead to a breakout for the Nasdaq 100?


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Big Tech stocks will release earnings after US markets close and most traders must wait until they open before being able to trade. But you can get ahead of the game by taking a position in premarket hours by taking advantage of our service that allows you to trade Big Tech stocks using our extended hours offering.

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