Here's Who Wins In Apple, Microsoft, Amazon, Alphabet Profit Clash

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It's profit showtime for the S&P 500 technology and communications biggies — and it's expected to be a bonanza. But some will likely pull ahead.

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Second-quarter profit reports from Microsoft (MSFT), Apple (AAPL), Facebook (FB), Alphabet (GOOGL) and Amazon.com (AMZN) are due out this week. And analysts are already handicapping their S&P 500 picks for growth and stock gains.

Wall Street sees the most top-line growth, 49.2%, coming from communication services giant Facebook, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. But when it comes to all important earnings growth, analysts are expecting more, 88.4%, from Google parent Alphabet.

And what about making money on the top tech and tech-related S&P 500 stocks? Amazon is the S&P 500 tech-related stock with the most upside, analysts say.

Tech And Telecom Headline Remarkable Quarter For S&P 500 Profit

S&P 500 profit gains in the second quarter are likely to set records. And tech giants are a big reason why.

Analysts think S&P 500 companies' profit will jump 74.2% in the second quarter, says John Butters, earnings analyst at FactSet. And if that's right, it would be the strongest period of profit growth since the 109% jump in the fourth-quarter of 2009.

And profit is only coming in stronger than anyone's wildest dreams. Nearly 90% of S&P 500 companies that reported their results so far topped profit expectations in the second quarter. And 86% of S&P 500 companies beat revenue views for the second quarter.

Technology's Massive Profit Contribution To The S&P 500

Tech stocks aren't the No. 1 source of growth in the S&P 500. But don't overlook their sheer profit contribution.

Information technology stocks in the S&P 500 are expected to post 33.2% higher quarterly profit, FactSet says. That only ranks sixth among the 11 S&P 500 sectors in terms of growth. But the sector's raw profit power is formidable.

Apple alone is seen posting an adjusted quarterly profit of $16.9 billion, or $1.01 a share. That's not only 57% more than the smartphone manufacturer made in the same year-ago period. It's a larger profit than any other S&P 500 company. Should you buy Apple stock now?

The only S&P 500 company with profit seen coming in anywhere close to Apple's is IBD Long-Term Leader Microsoft. Analysts think the software company will earn more than $14.6 billion, or $1.92 a share. That's up 31.8% from the same year-ago period.

But Apple and Microsoft aren't even where you'll find the most growth.

Looking For Growth? Find It With Alphabet And Facebook

The new S&P 500 market value darlings are showing fundamentals to back up their valuations.

No major tech or communications company is seen putting up top-line growth like Facebook. Analysts think the company's second-quarter revenue will hit $27.9 billion. If right, that's an astounding 49.2% top-line growth rate. And it's not just the top line that's jumping. Analysts think Facebook will report a quarterly profit of $8.8 billion, or $3.03 a share. That's 68% earnings per share growth from the same year-ago period.

Normally, that would blow out the S&P 500. But we're in a quarter where peer communications firm Alphabet is expected to make $12.8 billion, or $19.08 a share. That's 88.4% higher profit than the same year-ago period. Should you buy Alphabet stock now?

Believe it or not, though, Alphabet isn't the S&P 500 tech-related stock that will make the most money for investors, say analysts. That title goes to Amazon.com, which is actually a consumer discretionary stock. Analysts think Amazon will be trading for 4,269 a share in 12 months. That's more than 15% implied upside from Monday's closing price of 3,704.

So who's going to win the massive second-quarter profit season? It depends on how you measure it. But it's looking like a good time for all.

Sizing Up The S&P 500 Titans' Second Quarter

Company Symbol Q2 2021 revenue gr. (est.) Est. Q2 2021 EPS Gr. Q2 2021 net profit ($ billions, est.) YTD ch. Implied stock upside* Sector Report due
Alphabet (GOOGL) 46.4% 88.4% $12.8 52.2% 6.1% Communication Services July 27
Amazon.com (AMZN) 29.4 18.8 6.4 13.7 15.3 Consumer Discretionary July 29
Apple (AAPL) 23.1 57.0 16.9 12.4 5.3 Information Technology July 27
Facebook (FB) 49.2 68.1 8.8 36.1 4.8 Communication Services July 29
Microsoft (MSFT) 16.5 31.8 14.6 29.9 6.0 Information Technology July 27
Sources: IBD, S&P Global Market Intelligence, * - to 12-month price target
Follow Matt Krantz on Twitter @mattkrantz

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