Thursday, April 21st will give investors fresh insight into the performance of two titans of the US tech sector.

Google, whose parent company is Alphabet, and Microsoft have both enjoyed a pretty solid string of quarterly results as they’ve entered new markets, notably tapping the cloud sector for growth as consumers move away from PCs.

Both companies have greatly outperformed the wider tech sector over the last year and traders are eyeing the earnings for clues about the future trajectory of these stocks.

Microsoft

 

No doubt Microsoft is feeling the effects of the decline PC sales, its core market. Global shipments of PCs fell by 9.6% in the first quarter, according to research firm Gartner, which notes that “PCs are not being adopted in new households as they were in the past, especially in emerging markets”.

A preference for mobile devices means Microsoft needs to adapt but investors so far seem happy with the shift.

Shares in Microsoft are trading close to their dotcom bubble peak after rising more than 30% in the last year, greatly outperforming the 7% rise in the S&P 500 tech sector. Forward price to earnings have nearly doubled since 2013.

All eyes will be on Microsoft’s cloud revenues, which jumped by 140% in its previous quarterly earnings report. Investors will want to see continued progress on this front and may not mind a drop in PC sales if it’s showing progress elsewhere.

Consensus forecasts are for Microsoft to grow revenues by about 2% and for earnings per share (EPS) to hit 63 cents. The firm has beaten earnings forecasts for the last four quarters.

Google

 

Google parent Alphabet is set to post earnings after the closing bell on Thursday.

Shares are pretty well flat for the year but are up nearly 50% over the last 12 months.

While Google’s core offering remains profitable, the so-called ‘moonshot’ projects are a drag for now, costing the company $3.6bn last year.

Profit margin is holding firm around 25%, having inched back up over the last couple of years. Forecasts are for a 17% rise in revenues and EPS could soar to nearly $8 from just above $5 last year, according to some estimates.

At its last report, fourth quarter earnings hit $8.67 a share on $21.33bn in revenue as sales rose 18%

Amazon, Facebook, Apple

 

Google and Microsoft kick off the tech giant earnings season but we’re also looking to reports from the other members of the tech top 5, which combined are worth around $2.2 trillion and make up five of the top ten biggest companies on the S&P 500.

Apple reports on Monday (April 25th), with investors looking to the all-important forecasts for iPhone sales. The stocks down 13% over the last year but has enjoyed a small rally in 2016.

Facebook reports on April 27th and Amazon.com rounds out the top 5 on April 28th.