What's in Store for These 4 Technology Stocks in Q1 Earnings?

Technology stocks are expected to report strong quarterly results, driven by the increasing adoption of generative AI technology.

The strong demand for generative AI chips required in large language models has been on the rise, which is expected to have continued benefiting the semiconductor companies in first-quarter 2024.

The increasing adoption of machine learning (ML), Augmented Reality/Virtual Reality devices, quantum computing, and cloud computing is expected to bolster the performances of the technology companies.

Strong demand for data centers, fueled by the need for increasing cloud capacity to support AI-related workloads, is anticipated to have acted as a tailwind.

Rising PC shipments and signs of improvement in memory spending, especially in NAND and DRAM, are likely to have aided the technology stocks’ performance in the to-be-reported quarter.

The adverse effects of the ongoing war between Russia and Ukraine, macroeconomic headwinds, including persistent inflation, and unfavorable currency fluctuations are likely to have hurt the sector’s prospects in the to-be-reported quarter.

Insight Into Key Releases

Here we discuss four stocks in the Zacks Computer and Technology sector, namely, Advanced Micro Devices  AMD, IPG Photonics IPGP, Littelfuse LFUS and Skyworks SWKS, which are scheduled to release their quarterly earnings on Apr 30.

Per the Zacks model, a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today's Zacks #1 Rank stocks here.

AMD is expected to benefit from its robust portfolio and an expanding partner base. The adoption of its fourth-Gen EPYC processor by hyperscalers to power their internal workloads and public instances is expected to have acted as a tailwind in the to-be-reported quarter.

AMD expects first-quarter 2024 revenues to be $5.4 billion (+/-$300 million). The Zacks Consensus Estimate for revenues is pegged at $5.42 billion, suggesting growth of 1.24% year over year.

The consensus estimate for first-quarter earnings is pegged at 60 cents per share, up by a penny in the past 30 days.

The combination of a Zacks Rank #2 and an Earnings ESP of +28.33% increases the odds of an earnings beat for AMD. (Read More: Should You Buy Advanced Micro Devices Ahead of Q1 Earnings? )

Advanced Micro Devices, Inc. Price and EPS Surprise

 

Advanced Micro Devices, Inc. Price and EPS Surprise

Advanced Micro Devices, Inc. price-eps-surprise | Advanced Micro Devices, Inc. Quote

 
 

IPG Photonics' quarterly earnings are likely to suffer from lower materials processing sales, primarily due to weakness in cutting and marking applications. (Read More: IPG Photonics to Post Q1 Earnings: What's in the Cards?)

For the first quarter of 2024, the company anticipates sales to be $235-$265 million. Earnings are projected between 30 cents per share and 60 cents per share.

The Zacks Consensus Estimate for earnings is pegged at 48 cents per share, unchanged in the past 30 days.

The consensus mark for revenues stands at $250.33 million, suggesting a decline of 27.89% from the year-ago quarter.

However, the stock’s combination of a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00% makes surprise prediction difficult.

IPG Photonics Corporation Price and EPS Surprise

 

IPG Photonics Corporation Price and EPS Surprise

IPG Photonics Corporation price-eps-surprise | IPG Photonics Corporation Quote

 

Littelfuse is expected to have benefited from its diverse portfolio of products and technologies by offering a wide range of reliable technology solutions across various end markets, including electronics, industrials and transportation.

For the first quarter of 2024, the company anticipates sales to be $505-$530 million. Earnings are projected between $1.65-$1.85 per share.

The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, unchanged in the past 30 days.

The consensus mark for revenues stands at $519.13 million, suggesting a decline of 14.87% from the year-ago quarter’s levels.

The combination of a Zacks Rank #3 and an Earnings ESP of +0.57% increases the odds of an earnings beat for LFUS.

Littelfuse, Inc. Price and EPS Surprise

 

Littelfuse, Inc. Price and EPS Surprise

Littelfuse, Inc. price-eps-surprise | Littelfuse, Inc. Quote

 

Skyworks is expected to benefit from the growing demand for smartphones. The company is poised to benefit from its position in the global smartphone market, presenting significant growth opportunities. However, challenges in wireless infrastructure and traditional data center end-markets are expected to hurt SWKS's top-line growth. (Read More: Skyworks to Report Q2 Earnings: What's in the Cards?)

For the second quarter of fiscal 2024, the company currently expects revenues between $1.02 billion and $1.07 billion. Earnings are expected to be $1.52 per share at the mid-point of this revenue guidance.

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.05 billion, indicating a 9.28% year-over-year decline.

The consensus mark for earnings has remained steady at $1.52 per share in the past 30 days. The projection indicates a 24.75% decline from that reported in the year-ago quarter.

The combination of a Zacks Rank #3 and an Earnings ESP of +0.73% increases the odds of an earnings beat for SWKS.

Skyworks Solutions, Inc. Price and EPS Surprise

 

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. price-eps-surprise | Skyworks Solutions, Inc. Quote

 

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

Skyworks Solutions, Inc. (SWKS) : Free Stock Analysis Report

Littelfuse, Inc. (LFUS) : Free Stock Analysis Report

IPG Photonics Corporation (IPGP) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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