To The Moon

Apple & Alphabet (Google's parent company) announce their earnings on Feb 2, after the closing.

Implied volatility based on options for the above (Source: Refinitive / Streetinsider)

Based on options implied volatility, Apple could see a 5.1% up or down move, while Alphabetcould see a 6.1% up or down move. On average, based on the past four earnings announcements, Apple moved +1.7% after earnings while Alphabet moved -1.0% after earnings one week after. 

Apple - How much has supply chain improved

Investors would look for guidance for the following quarters this year especially with regardsto supply chain improvements. Some of the expectations of lower shipments in the iPhone 14 Pro line are likely been priced into the stock,but investors will want to watch how Apple is able to navigate the current environment where consumers are holding back on electronic gadgets like mobile phones, tablets and laptops. According to market intelligence provider IDC, 2022 total smartphone shipments reached 1.21 billion, the lowest annual shipment since 2013. Also look out on tailwinds from FX as the USD has weakened since start of November. 

US Dollar Currency Index (DXY)

Apple will look attractive for long term investors, it is Warren Buffett's largest percentage ofBerkshire's Portfolio at 38.4%. If the investor is not keen to take risk before trading on earnings, look out for any gap downs post earningsto score a discount on this stock.

Google's response to ChatGPT is key

Google is currently testing AI-like products like ChatGPT via its LaMDA technology (Language Model for Dialogue Applications), and has a ChatGPT called "Apprentice Bard" that could give detailed answers (even to recent events) as well as integrating chat technology into its search engine, according to sources and internal documents seen by CNBC. Rivals Microsoft are currently in the number one spot with regards to AI technology, and they might incorporate ChatGPT into Bing search engine in the coming weeks.

Look out for advertising revenue and cloud segment revenue, and how much has the impending recession affected advertising spend. AlsoGoogle Cloud is currently third in terms of Cloud market share, and have some significant room before they catch up with Microsoft and leader Amazon.

Earnings season usually involve risks in the stocks gapping up or down, and unless you planto take advantage of current prices and are able to manage your risk and take a long term hold on the stock, otherwise it is not advisableto trade on earnings.

$Apple(AAPL)$ 

$Alphabet(GOOGL)$ 

$Amazon.com(AMZN)$ 

$Alphabet(GOOG)$