Mark Mahaney, senior managing director and head of the Internet Research Team at Evercore ISI, argued Monday it's a "tough time" to be bullish on big technology companies.
Mahaney, author of "Nothing But Net: 10 Timeless Stock-Picking Lessons from One of Wall Street’s Top Tech Analysts," made the comment on "Mornings with Maria" ahead of second-quarter earnings reports scheduled to be released by Big Tech this week, including Apple and Amazon.
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Investors are bracing for the busiest week of the second-quarter earnings season with a big focus on the mega-cap tech titans.
Google’s parent company Alphabet and Microsoft are scheduled to report second-quarter earnings Tuesday, Facebook parent Meta Platforms on Wednesday, and Apple and Amazon on Thursday.
On Monday, Mahaney explained what he called the "triple storm" of negative factors facing technology companies.
"You’ve got very tough foreign exchange and all of these companies have 50% roughly of their revenues from outside the U.S.," the investment expert noted.
"You’ve got increasing signs of recessionary pressures or a reduction in consumer discretionary spend that will particularly impact companies like Apple and Amazon."
"And then you’ve got what are called ‘tough comps,’" Mahaney continued.
"June quarter of 2020 was an abysmal quarter, which led to dramatic growth in the June quarter of 2021, which means that now you’re comping against that, which means almost all of these companies will be reporting revenue deceleration."
He then advised that investors would be better off waiting to "see how much estimates get cut and then look to see which are the strongest assets."
Mahaney also argued that he believes estimates will get "cut" this week.