This Week's Tech Earnings - What I Expect

This week's earnings reports by Intel (Tuesday), IBM (Wednesday), Ebay (Wednesday) and Google (Thursday) will be watched closely to estimate the remaining earnings reports from the tech sector. I will be looking for these results to indicate how the stock market will trend for the next few weeks. Here's what I expect:

Intel - I expect Intel to meet their lowered guidance numbers. I believe Intel is taking market share from AMD, which disappointed last week. If Intel misses, I think the tech stocks will have a tough time in the second quarter of 2008.

IBM - They raised their guidance last time. If IBM misses, it will be bad news and the market will decline. I currently expect IBM to meet expectations.

Ebay - I think Ebay has become non-relevant. While Ebay is the dominant company in Internet auctions, other companies, such as Amazon.com, are chipping away at its business model and market share. If Ebay misses its expectation, I won't be too concerned.

Google - This is the wild card for this week. Google does not provide guidance. On the downside, an independent third party company, comScore, has reported that Google had a slowdown in paid clicks, its main source of revenue. Google has explained the slowdown as a result of improved validation of clicks, which will eventually result in higher, not lower, revenue. Thursdays results should give an indication of who is correct.

While I hope Google meets expectations, I believe there is a reasonable probably of a miss. If Google does miss, this quarter will be a challenging one for tech stocks.

Net, this week could be a turning point or a continued decline for the stock market, depending on the initial tech sector result. If the news is bad for Intel, IBM and Google, economic recovery may be delayed until 2009.

Disclosure: I own Google and Amazon.

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