3 things ASX investors should watch this week

eToro's Josh Gilbert picks out the biggest developments to keep an eye on for the health of your portfolio.

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Even though the ASX reporting season proper is still a couple of weeks away, there are some critical corporate results coming out this week.

These are three biggest ones, according to eToro market analyst Josh Gilbert:

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1. ResMed quarterly results 

Resmed CDI (ASX: RMD) might just have been the most discussed ASX stock of 2023.

The ASX healthcare company makes devices that treat sleep apnea.

During the last reporting season, the Resmed share price plunged almost 37% as investors worried about the impact of new GLP-1 weight loss drugs such as Ozempic.

"Some investors felt [GLP-1 drugs] would dampen ResMed's sales due to the connection between obesity and sleep apnea."

Although the stock has recovered 23% since the September trough, Gilbert warned anything could happen on Thursday.

"A good result would give shares the next leg up after a solid three months, but a miss on estimates could put shares under pressure, given its recent strong performance.

"The main headwind has been margins, which look set to fall again this week. Gross margins are expected at 56%, down from a year ago."

The positive is that analysts are expecting net income to increase 9% and for revenue to increase by a double-digit percentage.

"Its valuation also remains attractive at 23 times forward earnings, much lower than its historical average, pricing in recent challenges."

2. Microsoft quarterly results

An old favourite among Australian investors, Microsoft Corp (NASDAQ: MSFT) last week became the largest company in the world by market cap, overtaking longtime rival Apple Inc (NASDAQ: AAPL).

The 70% rocket in share price over the past year means there will be "little margin for error" in the latest results, according to Gilbert.

"It's been all about AI, with Microsoft chasing the tail of Nvidia Corp (NASDAQ: NVDA), looking to capture the first adoption benefits. 

"Microsoft has invested significantly, from its big stake in Chat-GPT pioneer Open AI to AI chips and a copilot AI subscription service."

The quarterly report will provide an update on how much customers are spending on artificial intelligence and Microsoft's cloud computing service Azure.

"The consensus is for earnings to rise by 20%, whilst revenue is seen climbing by 16%, the highest growth for two years."

3. Netflix quarterly results

After getting hammered in 2022 in a post-pandemic hangover, Netflix Inc (NASDAQ: NFLX) shares have roared back to the tune of 54% over the past 12 months.

"This resurgence is partly thanks to its new advertising plan and crackdown on password sharing," said Gilbert.

"Netflix has also stepped up its games service, adding the world-renowned Grand Theft Auto, which should provide a boost in the quarter."

Analysts consensus is that it could be a blockbuster quarterly report from the streaming giant with nine million net subscribers added, added Gilbert, and revenue expected to see the fastest growth in three years.

"The focus for the quarter is likely to be on the outlook for the full year 2024, with consumer spending set to slow, and investors wanting to see strong profit growth with subscribers now at record levels."

Motley Fool contributor Tony Yoo has positions in Microsoft and ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, Netflix, Nvidia, and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Apple, Netflix, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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