The Super Bowl of Earnings is Here!

The next 24 hours are set to be electrifying for the stock market, with four of the "Magnificent Seven" tech giants scheduled to release their earnings reports. Even more thrilling, three of them will announce their results today after the market closes. These earnings could either continue this week’s 5% slide in tech, spurred by AI-related fears, or ignite a rally that propels the market to new all-time highs.

Here’s a closer look at what’s at stake with three of the major players reporting today:

Tesla (TSLA)

Tesla has seen a wild ride since the start of the current administration. The stock skyrocketed from $212 to $488, delivering a jaw-dropping 132% increase. However, it’s been a different story since early January—Tesla is down 20%, now hovering between $390 and $400 as investors wait with bated breath for the earnings report.

Will Tesla’s numbers reassure investors and reignite the momentum, or will lingering concerns about its valuation and margins keep the stock in neutral?

TRADING CONSIDERATIONS FOR TESLA EARNINGS:

Sell the 460/465 Vertical Call Spread

or

Sell the 330/320 Vertical Put Spread

For those who want to own TSLA: Sell Cash Secured Puts at 365 or below

Microsoft (MSFT)

Microsoft has been trading within a range of $385 to $468 over the past year, but the company’s AI ambitions have made headlines. Its AI-powered Copilot software has reached 1.3 million users in just a single quarter, helping nearly 70% of Fortune 500 companies scale their operations.

A standout partnership with Vodafone has extended Copilot's reach to 68,000 employees across multiple countries, saving an average of three hours per employee and enabling them to focus on more creative and strategic work. With the AI division expected to hit a $10 billion milestone, Microsoft has positioned itself as a leader in the AI space.

Will these innovations be enough to drive MSFT to new highs tomorrow, or could an underwhelming report put a damper on its recent success?

TRADING CONSIDERATIONS FOR MICROSOFT EARNINGS:

Sell  the 470/475 Vertical Call Spread

or

Sell the 390/385 Vertical Put Spread

For those who want to own MSFT: Sell Cash Secured Puts at 395 or below

Meta Platforms (META)

Meta has been on fire, climbing 10% this week alone. The stock has gained significant traction, but the big question remains: can this momentum continue, or is it setting up for a pullback?

The temporary ban on TikTok in certain regions may have allowed Meta to capture additional market share, but it all hinges on their earnings performance. Will Meta deliver results that justify its rally, or will investors be caught off guard by a surprise slowdown?

TRADING CONSIDERATIONS FOR META EARNINGS:

Sell the 560/555 Vertical Put Spread

For those who want to own Meta: Sell Cash Secured Puts at 575 or below

Apple (AAPL)

Tomorrow, Apple takes the stage, releasing its earnings after the market close. Leading up to yesterday, the stock experienced a 15% decline but has since rebounded by 9%. Was this recent drop simply the market pricing in what’s to come?

Adding to the intrigue, many are still questioning why Warren Buffett’s Berkshire Hathaway sold off 510 million shares earlier this year, slashing its stake in Apple by 56% during the first half of 2024. Could this move signal deeper concerns, or was it just a strategic adjustment? All eyes are on Apple as we await the results.

TRADING CONSIDERATIONS FOR AAPL EARNINGS:

Stay Tuned!

Final Thoughts:
With so much on the line, today’s earnings releases could be the deciding factor in determining whether this week’s tech pullback continues or if a rally is in store. However, attempting to predict these outcomes before the reports drop is nothing short of gambling. As exciting as the market looks, patience is key. Let the earnings dictate the direction before making any bold moves.

DISCLAMER:

This is not financial advice: Pleas do your research or consult a financial advisor before making investment decisions.

Stay tuned—it’s about to get interesting!