Microsoft, Amazon, And Google Will Produce Strong Cloud Results This Earnings Season

According to a Wedbush analyst, several large companies should deliver solid cloud results in their upcoming earnings sheet owing to the stabilization of cloud spending across businesses, particularly Microsoft, Amazon.com and Alphabet.

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It is worth pointing out that Microsoft MSFT -2.23% (ticker: MSFT) gives you access to Microsoft Azure, Amazon AMZN -2.00% (AMZN) gives you access to Amazon Web Services, and Alphabet GOOGL -2.18% (GOOGL) gives you access to Google Cloud Platform. According to a research note sent out to investors by Wedbush analyst Dan Ives, Microsoft, Amazon and Alphabet are likely to report cloud results for their upcoming earnings in which they will either meet or beat expectations on Wall Street.

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The Street is not expecting to see the strong growth in large cap technology companies and their subsectors such as cloud computing and cyber security. The report goes on to state that despite the pressure on budgets throughout the business community, enterprises have already approved projects and deployed applications in 2023, and most budgets have already been slashed.

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The tech earnings season is quickly approaching. Alphabet is scheduled to report on April 25 while Microsoft and Amazon are scheduled to report on April 27. The IT spending results are concerning since customers are tightening their budgets as of late. In its fifth month in a row, IDC's forecast for enterprise spending in 2023 has been trimmed for the fifth time in the last five months. This is a result of the weakening economy, which has had an impact on technology investments in recent months.

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Nevertheless, IDC pointed out that cloud spending appears to be showing signs of resilience, which might support Ives' opinion that cloud results for the tech giants will be impressive.

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In the report, it is reported that service provider spending has not reached its highs of last year as the industry adjusts to the slower growth that followed the Covid disaster. However, planned investments by cloud and hyperscale providers have generally held up since last month. While inflationary pressures continue to drive cloud service growth, non-cloud spending is expected to decline in the near future.

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The stock market is off to one of its best starts since the start of the year, with Microsoft soaring 22% and Amazon up 23%.