3 Top Stocks to Buy Before They Share Earnings

Big tech earnings season is here, and top TSX stocks like Shopify are expected to put out big numbers.

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Big tech earnings season is upon us. This week, America’s biggest tech companies are reporting earnings, and Canadian tech companies are reporting shortly after that. Most likely, if you follow financial news, you’ll be hearing a lot about U.S. tech in the days and weeks ahead. About half of America’s biggest tech companies report this week, so their releases will be hard to miss. Canadian tech earnings are also a big deal. You most likely won’t hear as much about them as their U.S. counterparts, but they’re important, because they make up sizable percentages of many investors’ portfolios. In this article, I will explore three tech stocks that may be worth buying before they report earnings.

Shopify

Shopify Inc (TSX:SHOP) is a Canadian tech company that reports earnings on May 4. Shopify does over $4.5 billion in annual revenue powering online stores including those belonging to some of the world’s biggest celebrities and brands. Because of the company’s large footprint, Shopify’s earnings tend to be closely watched.

Shopify’s previous earnings release disappointed investors. In it, the company did manage to grow revenue at 26% and gross profit at 11%, improved from the prior quarter. The problem was that net income and operating income were both large losses. If Shopify can turn profitable in the first quarter, then its stock may start gaining momentum. However, the reaction to a miss could be very severe, as Shopify is an expensive stock trading at about 10 times sales.

Kinaxis

Kinaxis Inc (TSX:KXS) is a Canadian supply chain management software company. It develops software that helps people predict and respond to supply chain challenges and opportunities. For example, using Kinaxis software, businesses can recognize peak demand times at their business, and up their inventory for when these times are likely to occur. Kinaxis uses AI to facilitate this and other key data analytics functions, making it one of Canada’s most notable AI stocks.

Kinaxis delivered pretty good performance in its most recent quarterly release. In it, the company grew its revenue at 44% and was profitable. It was much better than Shopify’s most recent release. If the supply chain solutions provider can put out another showing like that in its next release, then KXS stock might rally.

Apple

Apple Inc (NASDAQ:AAPL) is one stock that I am personally holding ahead of its May 4 earnings release. Apple’s last earnings release was not particularly great, as it showed slight declines in both revenue and profit. However, the declines were partially due to currency fluctuations and supply chain issues. In the fourth quarter, China (where most of Apple’s products are manufactured) was still partially under lockdowns. As a result, Apple had a hard time getting an adequate supply of iPhones and other key hardware items.

This quarter, Apple will have a much easier time on the hardware front. China re-opened in December, and its economy quickly recovered in the first quarter. There were some rumours that Foxconn, Apple’s Chinese supplier, saw a slowdown in demand in the first quarter, but that could have been due to Apple moving some manufacturing to Vietnam and India. On the whole, I’m pretty optimistic about Apple’s upcoming release.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button has positions in Apple. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Apple and Kinaxis. The Motley Fool has a disclosure policy. Fool contributor Andrew Button has positions in Apple.

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