Will Apple Join The Party After Big Tech's Earnings Outperformed Last Week? Here's What One Analyst Says.

Big tech stalwarts Microsoft Corp. MSFT, Meta Platforms, Inc. META, Intel Corp. INTC and Amazon, Inc. AMZN reported better-than-expected results last week, and, recently, an analyst at Wedbush weighed in on the outlook for the tech sector against the backdrop of the companies’ performances.

Narrative Clarified: Despite the skepticism heading into the first-quarter earnings, the "narrative for the tech sector is becoming clearer and clearer," wrote analyst Daniel Ives in a note.

Ives noted that cloud growth has been stable and very resilient, digital advertising has been holding up and seeing moderating tailwinds, and enterprise IT budgets have been showing modest growth despite some glaring weak spots. Amazon's AWS has been losing its share of the cloud space to Microsoft as more enterprises align with the latter company, he added.

The analyst shrugged off last week’s softer earnings from cybersecurity names such as Tenable Holdings, Inc. TENB and Cloudflare, Inc. NET.

Citing channel checks, the analyst wrote that demand trends have been more or less stable. He said cybersecurity stalwarts such as Palo Alto Networks, Inc. PANW, Crowdstrike Holdings, Inc. CRWD, Fortinet, Inc.  FTNT and others are likely holding up well.

Ives also reiterated his view that the tech sector is poised for another 10% this year.

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Investors Looking Past Valley: The Street is looking past the near-term period of macro uncertainty and trying to zero in on tech winners on the other side of the valley, Ives wrote.

Despite aggressive cost cuts, companies are still splurging on artificial intelligence. Over the next decade, the AI space will represent an $800 billion market opportunity, he added.

Microsoft is leading the AI arms race, while Alphabet, Inc. GOOGL GOOG is just behind, he added.

Apple On Tap: "This week, all eyes on the Street will be on Apple's earnings Thursday night," Ives wrote.

"Apple will be a telling tale around consumer demand trends seen in the U.S. and especially China which remains a very debatable point on the Street," the analyst added.

Meanwhile, iPhone units appear very stable and will likely beat estimates, and the services business is showing strength from Apple's "golden installed base," he wrote.

Tech Price Action: The Technology Selector Sector SPDR Fund XLK ended Friday's session up 1.09% at $150.83, according to Benzinga Pro data.

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