Earnings: 5 Hot Stocks to Watch This Week

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With earnings season well under way, some of the stock market's biggest names are set to report results this week. During the action-packed week, Microsoft (NASDAQ: MSFT) and Facebook (NASDAQ: FB) are both scheduled to report earnings on Wednesday, and Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Amazon.com (NASDAQ: AMZN) are set to share their latest quarterly results on Thursday.

With a minimum market capitalization of $546 billion among them (Facebook), these stocks have a good chance of shaking up the market this week. Ahead of their earnings reports, here's a look at each company.

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Facebook

Facebook did what it usually does when it reported third-quarter results and crushed expectations with a wild 47% and 77% year-over-year jump in revenue and earnings per share. With management recently warning that revenue growth will decelerate during the company's fourth quarter as the impact of growth in ad load becomes less of a catalyst, investors should expect slower growth in the social network's fourth quarter.

The consensus analyst estimate for Facebook's fourth-quarter revenue and earnings per share is about $12.5 billion and $1.95, up 42% and 38%, respectively.

Microsoft

With double-digit top- and bottom-line growth in its first quarter of fiscal 2018, Microsoft has continued to highlight the strength of its successful transformation to mostly cloud-based products and services, including lucrative businesses like its server products, cloud services, cloud-based Office 365, and cloud-based Windows products and services.

Investors will look for strong growth in the company's second quarter of fiscal 2018. On average, analysts are expecting revenue and EPS to rise about 9% and 8%, respectively. While this is lower than the company's first-quarter growth, it's well above the software giant's five-year average annualized growth in revenue and EPS of 4% and 6%, respectively.

Apple

With a market capitalization of $866 billion, Apple is the closest company to the high-profile $1 trillion market capitalization milestone. If the company's third-quarter performance, featuring 12% and 24% year-over-year growth in revenue and EPS is any indication of the growth the tech giant will see in fiscal 2018, Apple could easily be the first trillion-dollar company.

On average, analysts expect fiscal 2018 first-quarter revenue and EPS of $87 billion and $3.81, respectively. This would represent year-over-year growth of about 11% and 13.4%. But investors will probably be just as interested in Apple's guidance for second-quarter revenue as they are first-quarter results. Currently, analysts are modeling for a notable 28% year-over-year jump in second-quarter revenue.

Alphabet

With a price-to-earnings ratio of 39, Alphabet needs to report consistently strong growth. Fortunately for shareholders, the company showed an exceptional ability to do this in its most recent quarter, when revenue growth accelerated. Third-quarter revenue and EPS climbed 24% and 32%, respectively.

Analysts expect Alphabet to report fourth-quarter revenue and earnings per share of about $32 billion and $10.00, respectively. This would represent 22% and 7% growth compared to the year-ago quarter.

Investors will want to pay particularly close attention to Alphabet's "Google other" segment, which has seen 40% plus year-over-year revenue growth recently. Can this strong growth persist in Q4?

Amazon.com

The holiday season will come into focus for Amazon when the company reports its fourth-quarter results.

After posting higher-than-expected revenue and earnings per share in the company's third quarter, investors have high hopes for Q4 -- and so does management. The company guided for accelerating revenue growth. Management said it expected fourth-quarter net sales and operating income to be in the ranges of $56 to $60.5 billion and $300 million and $1.65 billion. On average, analysts are expecting fourth-quarter revenue and EPS of $59.8 billion and $1.84, up significantly from $43.7 billion and $1.54 in the year-ago quarter.

Investors will be watching these stocks closely. All of these companies have seen their stocks soar in the past 12 months, with the smallest return from Alphabet (38%) and the highest return from Microsoft (47%). Can they keep their momentum?

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Apple and Facebook. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Facebook. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

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