February tech stock preview
January's parade of earnings served brought tech companies this friendly reminder: Mobile is king.
It was led by Apple, which sold a jaw-dropping 74.5 million iPhones during the first quarter, when countless shoppers seek out holiday gifts.
It's more than just hardware, Nasdaq tech analyst Rayner Turley says. As more consumers use their smartphones as a critical hub for everyday life, more tech companies transform their businesses to keep up.
Two ways companies have impressed investors, Turley says, is through rising daily user figures and making money off mobile ads.
"Mobile advertising is really starting to turn in some really impressive monetization rates," Turley says.
Consider Facebook. The social network spent the past couple of years shifting to a mobile-first environment. During its fourth quarter, nearly 70% of its advertising revenue came from mobile, while its mobile user base jumped 26%. That's led to seven straight quarters beating Wall Street on revenue and profit forecasts.
What to watch for in February? Turley says keep an eye on emerging markets, which boast strong potential for mobile growth. "In the next six-12-18 months, we'll see that user growth really take off."
The tech earnings parade isn't slowing down. Here are three to watch in February:
•Twitter: Speaking of user growth, the social network wraps its first year as a publicly traded company, facing questions on how quickly it can add users. During the third quarter, its base of monthly active users grew 4.8%, too slow for investors. Will Twitter report a faster pace when it shares fourth-quarter results this week?
•LinkedIn: The professional social network reports fourth-quarter and full-year earnings this month. Last quarter, LinkedIn dazzled investors with its third-quarter results but offered a weak outlook for the fourth quarter. After a hot summer of 2014, when shares jumped 46% from July to early September, LinkedIn has hovered around the $220-$230 zone.
•Pandora: Last quarter's earnings and revenue were music to Wall Street's ears, but listener hours were lower than forecast. Will the streaming music giant rebound with its fourth-quarter results?
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