Shockwaves were felt across the technology sector earlier this week after Apple warned investors that it may not meet its first quarter revenue guidance due to coronavirus outbreak.
Apple shares tumbled as much as 3.2% on Tuesday with the tremors felt across the board with investors questioning whether other companies exposed to China will also issue similar profit warnings. The ‘Big Five’ comprising of Facebook, Amazon, Apple, Microsoft and Google (F.A.A.M.G) all reacted differently to Apples’ surprise sales warning. Much attention should be directed towards how the five biggest US tech companies react to the coronavirus developments, as they account for roughly 18% of the S&P 500 total value.
Facebook nurses wounds and grinds higher
After tumbling 7.5% near the end of January on disappointing Q4 earnings, Facebook shares have grinded over the past few weeks gaining roughly 6% month-to-date.
Stocks have pushed higher this week despite the overall caution and could challenge $220 if the positive momentum holds. Focusing on the technical picture, bulls are fighting for control with $220 acting as the first level of interest. A breakout above this point could inspire a move higher towards $223.50.
Alternatively, a move back below $213 has the potential to trigger a decline towards $206.50.
More pain ahead for Apple shares?
Apple shares shed over 3% on Tuesday after the multinational technology company warned investors it could miss revenue targets this quarter thanks to the coronavirus outbreak.
With the outbreak “temporarily constraining” global iPhone supply and impacting demand in China, shares may decline lower this month. Stocks are still up over 8.5% year-to-date despite the latest profit warnings. However, these gains will be under threat if uncertainty pushes stock prices below $300.
Amazon joins the $1 trillion club
Amazon joined the 1 trillion Dollar club last month after reporting better than expected earnings and sales for the holiday quarter.
The company shares have gained almost 1% this week and over 16% since the start of 2020 on rising optimism over the company’s business outlook. Speculation around strong growth in its cloud services and advertising business could push stocks higher this quarter. However, gains are poised to be tested by the impacts of the coronavirus outbreak.
Amazon shares are trading around $2154 as of writing and may challenge $2185 in the short term.
Microsoft stocks near all-time highs
Microsoft shares have been on a tear, gaining almost 19% since the start of 2020!
A combination of impressive quarterly earnings and strong sense of optimism over the growth of various products continues to boost appetite towards the company’s stocks. Microsoft shares are trading around $187.00 and could test the all-time high of $190.70 this month. A breakout above $190.00 may open a path towards $200.
Google bulls remain in the driving seat
Google-parent Alphabet eased from an all-time high of $1529 as investors continued to digest the Q4 earnings and impacts leadership reshuffle to the company’s future. Investors are also accessing how the new CEO will navigate through challenges in the form of digital tax, tighter regulations and being dragged into the broader trade conflict. Alphabet stocks have performed relatively well over the past few weeks, gaining roughly 13.4% year-to-date.
In regards to the technical picture, a strong weekly close above $1530 could open a path towards $1550.
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