Your earnings investing playbook for the big Apple, Amazon and Alphabet results after the bell

Published Thu, Feb 2 202312:52 PM EST

Jesse Pound @/in/jesse-pound @jesserpound

Thursday is a massive day for tech investors, as Amazon , Apple and Google-parent Alphabet are all set to report fourth-quarter earnings after the market close. The Big Tech stocks have all rallied to start 2023, despite widespread layoffs in the sector and fears of an economic slowdown this year that could hurt consumer spending and advertising. Wall Street analysts have generally lowered their estimates for the fourth quarter in recent months, but that could create room for upside surprises and big rallies, as seen in Meta Platforms on Wednesday evening . Here's a look at the expectations and key points of interest for Thursday's reports: Amazon Amazon is trying to navigate the inventory and demand issues that the hit retailers last year with an expected slowdown in corporate spending and advertisers that is clouding the outlook for tech companies. Wall Street analysts expect 17 cents per share on $145.7 billion of revenue, according to FactSet's StreetAccount. The e-commerce giant tends to have much narrower profit margins than the other tech heavyweights, which increases the focus on Amazon Web Services. The cloud business is the most profitable part of Amazon, and investors will be looking to that segment to help support Amazon if there is an economic downturn. "After a dismal 2022 and then running up with the broader basket of underperformers in this year's early rally, investor sentiment seems to be focused on a better entry point following what could be a miss on any number of fronts, ranging from AWS to advertising to ecommerce in general," Benchmark analyst Daniel Kurnos said in a note to clients on Wednesday. Benchmark has a buy rating on the stock, and Kurnos said that he expects Amazon to "probably beat a nicely lowered bar" in its quarterly report. Wedbush analyst Michael Pachter is the most bullish analyst for this quarter, according to FactSet, projecting 32 cents in earnings per share. However, he did warn in a note to clients on Jan. 27 that the company's revenue and operating income may come in below Wedbush's projections. Analysts and investors could also be looking for more information about the new Buy with Prime program, which Morgan Stanley estimated could become a $3.5 billion business . Here are some key stats about Amazon's earnings report: Over the past three months, earnings estimates have fallen from nearly 22 cents per share to about 17, according to FactSet. Amazon has missed EPS estimates in three of the past five quarterly reports. Analysts are bullish on the stock in general, with an overwhelming percentage of buy ratings and an average price target of $136.32, according to Refinitiv. That is nearly 30% above where the stock closed on Wednesday. Apple The consumer tech company is expected to report its first decline in revenue since 2019 on Thursday when it releases its fiscal first quarter results. Apple warned in November that iPhone shipments would be lower than expected due to pandemic related production issues in China. Wall Street is looking for earnings per share of $1.94 and $121.4 billion of revenue, according to StreetAccount. Barclays analyst Tim Long, who has a neutral rating on the stock, said in a Jan. 30 note that the production issues aren't the only problems facing Apple. "What started out as production-driven cuts have moved to demand weakness across product categories. We are also concerned by decelerating Services growth," the note said. Long's estimate of $1.85 in earnings per share for the December quarter is below consensus estimates. On the other hand, Dan Ives of Wedbush has one of the highest earnings estimates for this quarter, according to FactSet, at $2.08 per share. However, Ives did cut his price target on Apple to $175 per share from $200 last month. Here are some key stats about Apple's earnings report: Over the past three months, earnings estimates have dropped from about $2 per share to roughly $1.94, according to FactSet. Earnings trend: Apple has beaten EPS estimates for 15 straight quarters. Wall Street analysts are still overwhelmingly bullish on Apple, with 10 strong buy ratings and zero sell ratings, according to Refinitiv. The average price target of nearly $171 per share implies upside of more than 17%. Alphabet Alphabet's earnings report could provide investors a clear window into the tech industry more broadly, given the company's reliance on search advertising and cloud computing. Wall Street analysts expect $1.18 in earnings per share on $63.1 billion of net revenue, according to StreetAccount. MKM Partners analyst Rohit Kulkarni is one of the analysts on the high side of estimates, with a projection for $1.28 in adjusted earnings per share. However, Kulkarni did trim that from $1.34 per share in a Jan. 25 note. Kulkarni cited a slowdown in cloud spending as one concern for Alphabet. The reaction for Alphabet's stock could be impacted more by the forward looking discussions from company management. Analysts will be interested in the financial impact of Alphabets recent layoffs and the company's plan to compete with the new ChatGPT product backed by Microsoft . "We assume an FX benefit will offset some incremental core revenue pressure, and expect layoffs to start aiding core Google margins in 2Q, with y/y margins turning positive in 2H'23. We assume capex is down 2% y/y in 2023, though AI competition could drive some added investment. Questions on the competitive threat from ChatGPT could be top item on the call," Bank of America's Justin Post said in a Jan. 30 note. Post has a buy rating on the stock and his earnings projection for the fourth quarter is mostly in line with consensus at $1.20 per share. Here are some key stats about Alphabet's earnings report: Over the past three months, earnings estimates have declined by about 2 cents per share to roughly $1.18, according to FactSet. Earnings trend: Alphabet has missed EPS estimates for three straight quarters, according to FactSet. Alphabet also has no sell ratings from analysts, and just four hold ratings out of 48 total, according to Refinitiv. The average price target of nearly $124 per share represents upside of more than 23% from where the stock closed Wednesday. — CNBC's Michael Bloom and Fred Imbert contributed to this story.