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Wall Street cuts price targets for Apple and Amazon ahead of their earnings

Wall Street institutions cut price target expectations for both Apple and Amazon ahead of their earnings reports due out later today.

Video transcript

SEANA SMITH: All right. A big story of the day here. This afternoon, big tech is on deck. We have Apple and Amazon both set to report earnings after the bell. Analysts cutting their price targets ahead of these results. Amazon getting its price target cut by 5 analysts just this month alone. Apple, pretty much in the same boat for price target cuts this month, another in June. Rochelle, all eyes are going to be on these two companies. Because we talk about--

Let's start with Apple, obviously, the company has been struggling a little bit since the start of the year. We can say that for a lot of these larger tech names. Wall Street trying to figure out what exactly the future looks like for Apple. We had that recent note from Morgan Stanley saying that a huge bet on services could actually get Apple back above that 3 trillion market cap mark. You can see it today sitting right around 157 a share.

RACHELLE AKUFFO: I mean, Apple really is the one to watch. Because even though it has seen a slowdown, it's still been outpacing Microsoft, Alphabet, and Amazon so far this month, as well as seeing better gains in the S&P 500 and the NASDAQ 100 and all while still facing those same macroeconomic headwinds, rising inflation, cooling consumer demand, obviously, the strengthening dollar, even the lockdowns in China.

But they do seem to believe that Apple can weather this storm. If anyone can, they do believe that Apple can.

- Isn't it remarkable, Rochelle, when you talk about all those headwinds, add to it their pullback and exit out of Russia? So they have so many headwinds, waning demand and smartphones. Expected to post their first iPhone sales decline in two years. And we've heard a lot about that number, two years, which is early, right when the pandemic kind of broke out. But this--

Expect this to kind of show Apple's dominance. Even if it's a number that's not great, you're still looking at near $100 billion in fiscal 22. I mean, that's a remarkable achievement for a company facing half a dozen major global headwinds. It's just going to be another day where we, I think, remark at the strength of this company.

SEANA SMITH: Yeah. And it will be interesting to see how Wall Street interprets these results. You mentioned the expected year-over-year declines in the iPhone, that's also the case for iPads and wearables as well, when it comes to revenue. So even if they just meet those expectations, it will be interesting to see whether or not that's enough. And then, real quick, Amazon, another big name that we need to focus on.

Revenue there expected to come in at 119.5 billion and adjusted EPS of $0.52. A lot of this focus is going to be on its cloud division, AWS. Revenue there expected at 19.4 billion. Now in the last quarter, the last earnings call Amazon saying that it wasn't seeing any softness because of inflation. Whether or not that changed will be interesting, especially in the wake of what we just heard from Walmart earlier this week.

- Largely we know that the e-commerce story, which is overexpansion, trying to bet that pandemic demand would continue, it certainly did not, they have too much warehouse space and too many employees and trying to cut those too back. So that we largely already know the e-commerce story. But it will certainly be a fascinating read on those earnings.