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Why You Should Watch FB, GOOGL, AMZN Ahead Of Earnings

Loading the player… Three top tech stocks are trading very near buy points as handles have formed on their bases: Facebook ( FB ), Google owner Alphabet ( GOOGL ) and Amazon ( AMZN ). And with each company reporting earnings in the coming weeks, these stocks deserve a watchful eye. JPMorgan noted Thursday that while FANG stocks (Facebook, Amazon, Netflix ( NFLX ) and Google/Alphabet) have somewhat underperformed so far this year, their fundamentals are still solid. After rising nearly 18% from its February low, Facebook was trading 3% below a 117.09 buy point Thursday as it dipped less than 0.1%. If and when the stock breaks out, look for heavy volume, which signals institutional support. A catalyst for a Facebook breakout could be the company’s quarterly earnings report on April 27. Earnings are projected to jump 48%, marking a third straight quarter of faster growth. Revenue is also expected to rise 48%, a slowdown from the prior quarter’s 52% growth. Alphabet was trading 2% below a cup-with-handle buy point of 777.41, and closed down 1%. It’s 6% below its high reached in early February. Alphabet reports quarterly results on April 21. Analysts expect earnings growth of 23%, slower than the last quarter’s 28% gain. Revenue is estimated to climb 17%, slightly slower than the 18% gain it saw in Q4. Facebook and Alphabet are both members of the IBD 50 list of leading stocks and earn a highest-possible IBD Composite Rating of 99. Amazon has an 81 Composite Rating. The stock is trading 2% below a 603.34 buy point and 15% below its late December high. Shares fell 1.8% Thursday. The e-commerce giant’s bottom line is projected to skyrocket 583% when it issues its quarterly report in a couple of weeks. That would mark a second quarter of accelerating growth. The top line is estimated to climb 23%, faster than Q4’s 22% rise. Meanwhile, the fourth FANG stock, Netflix, is trading more than 20% below its high set in early December. Shares, which have been hitting resistance at the critical 200-day moving average, dipped 0.4% Thursday. Netflix reports its quarterly results on April 18.

Google Picture Brightens, Thanks To Larger-Screen Smartphones

Fast growth for YouTube and mobile search — along with expected positive benefits from the wider adoption of large-screen smartphones — netted a price-target boost for Alphabet ( GOOGL ) and its Google subsidiary on Thursday. Morgan Stanley raised its price target on Alphabet stock to 900 from 880. Smartphones with big screens — such as Apple ‘s ( AAPL ) iPhone 6S Plus and Google Android Galaxy Note 5 by Samsung — will have a positive impact on Google’s revenue, wrote Morgan Stanley analyst Brian Nowak in a research report. “Indeed, the growing mix of large-screen smartphones combined with our agency conversations (are) indicating that these screens are monetizing higher,”  Nowak wrote. He says such ads are getting 20% to 35% higher costs per click, which is how much Google is paid each time someone clicks an ad. He says larger-screen smartphones could boost Google’s search revenue by 3%. Ahead of the Alphabet’s Q1 earnings release, “we see Google websites growing the fastest (they have) in over four years, driven by accelerating mobile search and YouTube,” wrote Nowak. Alphabet is slated to post Q1 earnings after the market close on April 21. Alphabet stock was down more than 1% in afternoon trading in the stock market today , near 758. Alphabet stock is forming a cup-with-handle base, with a 777.41 buy point. Morgan Stanley boosted its 2016 and 2017 revenue estimates for Alphabet by 1%, to $88.3 billion and $129 billion, respectively. It raised its 2016 EPS ex items estimate 4% to $35.99, and its 2017 estimate 3% to $43.49. “We are now 2% ahead of Street Q1 2016 revenue and non-GAAP EPS, and 1% ahead of full-year 2016 revenue, and 4% ahead of full-year 2016 non-GAAP EPS,” said Nowak. “We see accelerating top line, expanding core Google, non-GAAP EBITDA (earnings before interest, taxes, depreciation and amortization) margins, and positive revisions driving Google higher.” The number of minutes spent on YouTube minutes is estimated to grow 42% year over year in Q1, Nowak said, vs. a 23% rise in Q4 2015.

Virtual Reality Headset Sales Seen Reaching $895 Million This Year

High-end virtual reality headsets from Facebook ( FB )-owned Oculus, HTC and Sony ( SNE ) will account for just 13% of unit shipments in the emerging market this year. But they’ll make up 77% of revenue spent on VR headsets in 2016, Strategy Analytics predicted Thursday. The research firm estimates that VR headsets will generate sales of $895 million worldwide this year. Most of the revenue will come from the recently launched Oculus Rift and HTC Vive, as well as this fall’s PlayStation VR, the firm said. But most of the 12.8 million VR headsets sold this year will be lower-priced devices in which a smartphone serves as the VR screen. Samsung’s Gear VR and Alphabet ’s ( GOOGL ) Google Cardboard are among these cheaper headsets. State-of-the-art virtual reality headsets tethered to PCs and game consoles will barely exceed 1.7 million devices shipped globally in 2016 due to high pricing, Strategy Analytics said in a research report. Smartphone-based VR systems can serve as an effective “gateway drug” to upsell users to higher quality VR experiences down the road, researchers said. VR could fuel a new “tech spec race” in high-end hardware in areas such as display resolution, graphics processing units, storage and 360-degree cameras, Cliff Raskind, director of Strategy Analytics’ wearable device ecosystems service, said in a statement. Video games will be an early driver for VR headset sales. Other applications include virtual experiences in entertainment and sports, marketing and product retailing, and education and training. “Further out still, it is envisioned that increasingly capable 3D cameras and apps will allow users to relive (play back) and share experiences to VR headsets with compelling realism,” Strategy Analytics said. Oculus Rift began shipping on March 28 and costs $599. HTC Vive went on sale Tuesday and costs $799. PlayStation VR will cost $399 and go on sale in October. Oculus Rift and HTC Vive require the use of a high-end PC and PlayStation VR needs to be coupled with the PlayStation 4 game console. Image provided by Shutterstock . RELATED: Virtual Reality Could Disappoint Initially, Baird Says