Tech stocks, specifically Artificial Intelligence (AI) stocks, are dominating the market in 2023.
Wall Street analysts are bullish on tech stocks due to easing inflation and the seemingly endless potential of AI. Now is the perfect time to expand our tech holdings for long-term gains in this ever-developing sector.
We can’t miss out… Because just when we think we’ve missed the action, we realize it’s not too late.
For decades, Apple (AAPL) and Amazon.com (AMZN) have been pioneers in the tech sector, and earnings reports for both companies have been recently released… How did they fare?
Apple Inc (AAPL)
Apple (AAPL) is a compelling tech stock with potential in AI. Notably, its performance in greater China has been impressive, with sales growing by 8% to $15.76 billion. This region is crucial for AAPL, ranking as its third-largest sales market, and it’s experiencing clear acceleration.
Although AI is not extensively discussed in their reports, AAPL recognizes its significance and has been working on generative AI and other models for years. AI and ML (machine learning) are core technologies embedded in nearly every product AAPL builds, reflecting the firm’s commitment to innovation. Also, AAPL’s financial position is robust and indicates financial stability.
While overall sales declined 1% year-on-year and revenue from the iPhone, Mac, and iPad lines were down, it should be viewed in context with Apple’s consistently strong recent performance. These factors make AAPL a promising tech stock with growth potential and should be carefully considered as part of an investment strategy. AAPL has a decent dividend going now, too.
AAPL’s stock is up by 47.01% year-to-date, has a favorable 200/20 day SMA (simple moving average), a market cap well over $3 trillion (making it almost three times the size of AMZN), and a positive return on equity measure of 145%. At its last earnings call, AAPL beat analysts’ projections on EPS by reporting $1.26 per share vs. $1.19 per share as expected, a 5.49% surprise; it also met analysts’ revenue estimates. Scheduled to report again in late October, AAPL is predicted to post $90.3 billion in sales at $1.36 per share for the current quarter. AAPL has a 0.50% annual dividend yield and a quarterly payout of 24 cents ($0.96/year) per share. With a 10-day average volume of 48.34 million shares, AAPL has an average price target of $195, with a high of $240 and a low of $140; this represents a potential upside of more than 25%. AAPL, according to analysts, has 29 buy ratings and 14 hold ratings.
Amazon.com Inc (AMZN)
Amazon.com Inc. (AMZN) is an exceptional tech (and AI) stock to consider. Their revenue surged by 11% in the second quarter, beating analyst expectations. AMZN’s EPS was an impressive 65 cents, compared to the expected 35 cents, a nearly 90% surprise. Notably, Amazon Web Services (AWS) contributed significantly, generating $22.1 billion in revenue, exceeding Wall Street projections. AWS’s growth has stabilized, indicating a shift from cost optimization to new workload deployment by customers.
Furthermore, AMZN’s net income rebounded significantly, reporting $6.7 billion in the second quarter, a remarkable improvement from the $2 billion loss a year earlier. AMZN’s focus on AI is evident, with products being utilized by various customers, including Royal Philips, 3M, Old Mutual, and HSBC.
Advertising is also a booming business for AMZN, with quarterly revenue jumping by 22% to $10.7 billion. Compared to its competitors like Google and Facebook, Amazon’s ad revenue growth outperformed, demonstrating its strength in this space. With AMZN’s positive growth outlook, successful cloud business, and expanding AI capabilities, it presents an attractive investment opportunity, to put it lightly.
AMZN’s stock is up year-to-date by 53.45%, carries a positive SMA, positive TTM (trailing twelve-month) asset growth of 13.05%, and a 1.6x PEG (price/earnings to growth) ratio. At its most recent earnings call, AMZN not only crushed analysts’ EPS and revenue projections, but it also reported year-over-year growth in critical areas such as revenue (+9.37%), net income (+182.52%), EPS (+181.58%), and net profit margin (+175.45%). For the current fiscal quarter, AMZN is expected to report $138.3 billion in sales at $0.41 per share and a 3-5 year EPS growth rate of 3%. With a 10-day average trading volume of 59.45 million shares, AMZN has a median price target of $147, with a high of $220 and a low of $99; this represents a potential price leap of over 70%. AMZN has 49 buy ratings and three hold ratings.
Is there a clear winner here? It’s hard to say because they’re both in great shape and priced similarly. A strong case can be made for both, and we trust that you have enough insight to make an informed decision—unless that is, you were to get a piece of both. That works too.