Big tech reports earnings today, here's what you should expect

Big tech companies Apple, Amazon, Facebook, Twitter and Alphabet are all set to report earnings after the bell. TECHnalysis Research President and Chief Analyst Bob O'Donnell joins the On the Move panel to discuss.

Video Transcript

JULIE HYMAN: We have got a big day when it comes to tech earnings. Facebook, Google, Twitter, Apple, Amazon, all of them are reporting after the close of trading. And to preview those numbers, let's bring in Bob O'Donnell. He is TECHnalysis research president and chief analyst. He's joining us from California.

Bob, it's always good to see you. We're seeing these stocks rise today. We saw a dip yesterday, we also saw some of those folks testifying, of course, a couple days ago, which was also quite interesting. So when you look at these companies, let's start with Facebook and what you are predicting when it comes to this quarter.

One interesting note on Facebook, by the way, Pinterest reported and said it got ad revenue because of the boycott of Facebook. Do you think that that is going to have an effect in the quarter?

BOB O'DONNELL: I don't think it's going to have a big effect, Julie. I mean, I'm sure we're going to see big numbers from Facebook. I mean, they had a lot of political advertising, obviously, that they've now cut off. But, you know, they've had tremendous amount of focus and attention, given what we saw with the hearings as well.

I mean, that's a money-making machine right now, from an advertising perspective. And I can't imagine we'll see anything surprising based on those basic facts.

ADAM SHAPIRO: So let's switch to Amazon. Do you expect anything surprising there? I mean, we just got off of Prime Day. Prime Day was a little bit later than we would have had. So what's that going to look like in their report?

BOB O'DONNELL: Well, you know, Prime Day was in this current quarter. So we won't see anything from the last quarter's results, obviously, Adam. But, you know, look. There-- what we're going to see is, just as we saw with Microsoft with their Azure earnings, I'm sure we're going to see big AWS cloud-based computing earnings.

And look how dependent we've all become on online shopping with Amazon as sort of the poster child of that. Lots of other companies, of course, are benefiting from that. But, you know, Amazon is hiring 100,000 people for the holidays, I mean, that's a staggering number when you think about it, to address the demand that they expect. And they've clearly had big demand up till now. So again, I think we're going to see some pretty big numbers there as well.

JULIA LA ROCHE: Hey, Bob, it's Julia La Roche. And I noticed in your notes, you were talking about there are a lot of opportunities to learn from the previous quarter for some of these names, like Microsoft, Intel, Netflix, et cetera. What are the lessons that investors should, or traders, even, should be paying attention to from the prior quarter as these results come out?

BOB O'DONNELL: Well, it's a good question. I think the issue is we're going to see strong commercial growth. So those companies that are doing a lot of the B2B, the cloud computing, like Google, or Alphabet, the parent company, I think we're going to see strong growth from them as well as Amazon on the cloud side. You know, the question mark for me is around the consumer-oriented companies.

So what's going to happen with Apple? Look, Apple always ends up outperforming what everybody expects, and I can't imagine they surprise us in a negative way. But it just may not be quite as big. So to me, that's the question is, are we going to see a little bit of weakness and concern around consumer-based goods and services versus those business-based goods and services? And how does that reflect in the stocks that focus on each of those areas?

ADAM SHAPIRO: Turning to Google, do you think there will be anything in the report that would give ammunition to those on Capitol Hill who are looking at the antitrust issues and breaking them up?

BOB O'DONNELL: Look, you know, the antitrust issue with Google is extremely complex. And the issues that are getting focused on, I think we all recognize, have absolutely nothing to do with what the real questions are about the influence that they have. Issues around things like who controls the advertising sales network and elements like that aren't being discussed because they're extremely complex.

So I don't think we're going to see a lot there. I think we're going to see very strong growth in search-based advertising, and again, strong growth in their Google Cloud business, which has been growing quite rapidly over the last few quarters.

JULIE HYMAN: Bob, good to see you. Thanks so much. Bob O'Donnell, TECHnalysis--

BOB O'DONNELL: Thanks, guys.

JULIE HYMAN: --research president and chief analyst.