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Tech earnings preview: Analysts watch Apple iPhone numbers, Amazon sales growth

Yahoo Finance tech editors Dan Howley and Allie Garfinkle break down expectations for three major tech companies: Apple, Amazon, and Alphabet.

Video transcript

DAVE BRIGGS: Let's get you up to speed now on the enormity of the reports we're about to unveil and analyze, though. Three companies, nearly $5 trillion in market cap. That's trillion, with a T. Apple, Alphabet, Amazon, all reporting after the bell in what is our busiest earnings day of the year. Investors optimistic, with all three up between 3% and 6%. Tech Editor Dan Howley and Senior Tech Reporter Allie Garfinkle here with one big thing from each of the big three. Howley and Allie. I need-- I need a name for that. I'll work--

ALLIE GARFINKLE: Hallie?

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DAVE BRIGGS: --on it.

SEANA SMITH: Hallie, yeah.

DAN HOWLEY: Hallie, yeah.

ALLIE GARFINKLE: Not bad.

DAVE BRIGGS: A solid good start. I think we'll start with you, sir. Expectations for the big one, Apple.

DAN HOWLEY: Muted. We're expecting a decline, first decline since 2019, in revenue year over year. The big number that we're looking at is iPhone sales. Revenue there is expected to be 68.3 billion. That's versus 71.6 billion last year. And I think this is going to be the number that most people are looking at just because there's two issues at play here.

One was the supply side. There were the issues at the plant in China, where there were lockdowns due to COVID and worker protests. That impacted iPhone 14 Pro and Pro Max sales. And the other is on the demand side of things. Are consumers continuing to buy smartphones? The answer, I guess we'll find out. IDC was saying that there was a decline in overall user demand in the Q4 quarter. So Q4, that's Q1 for Apple.

SEANA SMITH: Could be a disappointing report here from that tech giant. Allie, you are watching Amazon. What are you focused on?

ALLIE GARFINKLE: So, to me, Seana, the real big question is, what does cost cutting look like for a company like Amazon? Yes, they've laid off 18,000 people. But what does it really mean for a company with its hands in so many different piles to be efficient? What is that story going to look like? Like, if you think about Amazon Studios, right, their budget's already 10 billion. So what do cuts really look like here?

The other thing, too, is Amazon is expected to report its slowest sales growth in 20 years today, slowing e-commerce services, slowing ads possibly. So what I'm hearing is that there's definitely going to be pressure on them to spin the cost-cutting narrative and figure out what that really looks like.

DAVE BRIGGS: Looking forward to get a good look at the consumer there. And finally, let's talk about Alphabet. You know I want to talk ChatGPT, but I'll let you-- I'll let you guide us where you will, sir.

DAN HOWLEY: I don't think they want to talk ChatGPT.

DAVE BRIGGS: No, they don't.

ALLIE GARFINKLE: They have to.

DAN HOWLEY: They do. I think, look, the revenue that we're looking at, expectations are relatively good, 63.2 billion versus 61.9 billion. That's [? ex ?] tech. But I think what everybody is going to be looking at is what this means for the digital ad market. Sure, we got Meta yesterday. Everyone says it's great news from Meta. Not really because their revenue is down year over year. And the ad market, they admit themselves, is still difficult.

Snap, obviously, they're dealing with the difficulties from the ad market. We'll find out what's going on here with Alphabet and Google, especially YouTube, where we had seen a slowdown in ad sales. So I think those are the big questions that people are going to have. If revenue's up, that's all well and good. But what does this mean for the overall digital ad market?

SEANA SMITH: All right, Alphabet, Amazon, and Apple all on deck. All four of us are going to be very busy here in just about 60 minutes or so. Dan and Allie, thanks so much.