2 Earnings Reports to Watch for Next Week
Believe it or not, it’s that time of year again. I’ve said it many times before and I’ll say it again: it feels like the last earnings season just ended yet here we are, ready for the earnings reports for the first quarter of 2024. It’s been a tumultuous one for the economy as inflation has reared its ugly head once again. The Fed continues to try to tame inflation but interest rate cuts have been pushed off from March to June at the earliest. Stocks continue to push all-time highs but so do assets like gold, Bitcoin, and treasury yields.
So what can we expect for this earnings season? Keep an eye on how tech companies who are involved in AI report. Will we see a decline in demand or are they going to prove that the AI fad is as hot as ever? As always, earnings season can be a crapshoot so I won’t necessarily provide any recommendations on stocks here. This article is merely meant to talk about two companies that I’ll have my eyes on for earnings without buying or selling the stock.
Taiwan Semiconductor Manufacturing Company (NYSE: TSM)
I wrote about this company last week as perhaps the real true winner of the AI race. I still think that could be true but I think that TSM is setting up to be a great investment from here on out. TSM reported its first-quarter revenue figures earlier this week and saw a 16.5% increase in sales for the quarter. This beat analyst expectations and fell into the high end of its guidance given last quarter.
The first half of the year is usually quieter for chip companies like TSM but AI demand has had a major impact on business. TSM makes the chips for companies like NVIDIA, AMD, and Apple, so it’s not surprising that business is good. Why am I watching TSM’s earnings report? I think it could establish a pretty strong baseline for chip stocks this quarter. We might not be done with the AI hype and if TSM’s early numbers are any indication, we could see another bullish quarter of growth for other chip companies. I would also watch ASML (NASDAQ: ASML) which reports earnings on Wednesday, one day before TSM.
Bank of America (NYSE: BAC)
Take your pick of banks next week, I’ll be watching the whole financial sector. Why? There have been a lot of rumours about banking failures and potential collapses. One such report said that a prominent Wall Street bank is preparing for the worst. While I doubt any of that comes to fruition, I will be curious as to how these banks provide forward guidance for the rest of 2024. The topic of rate cuts is huge and will have a significant impact on the profit of banks whenever they do get cut. Will banks nerf their guidance in anticipation of potential rate cuts? If so, we could see some discounts on bank stocks after this quarter. But who knows, we could see one or two more strong quarters from banks before the cuts come into effect. That’s why I’ll be watching next week!
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