Apple and Alphabet, among others, are due to post fourth-quarter results this week and all face “their own challenges,” according to technology fund manager Jeremy Gleeson. It comes after Microsoft issued a disappointing revenue forecast last week, but the stock performed better than expected. Gleeson, who manages the £1.1 billion ($1.5 billion) AXA Framlington Global Technology Fund, said bad news on Microsoft’s earnings had “spooked” some investors into selling the stock. However, the stock’s subsequent more than 2% bounce is an “encouraging” sign for the rest of Big Tech, Gleeson told CNBC’s “Squawk Box Europe”. MSFT 3M line Apple and Alphabet make up 8.7% and 7.8% of the AXA Framlington Global Technology fund. Apple The biggest concern for investors is the loss of demand for Apple products due to a lack of supply, according to Gleeson. Apple, which makes 95% of its products in China, has had supply chain problems since Beijing implemented a zero-Covid policy by 2022. However, Gleeson believes Apple’s poor fourth-quarter results are a one-time event. does not reflect a long-term dent in consumer demand. “The sales we made in Q4 are not necessarily a fair reflection of what the demand for the product is there because of the supply constraints – in terms of what we can produce,” the fund said. the manager said. Having said that, Gleeson remains bullish on Apple. He said there is “fairly good and healthy demand” for Apple products despite the recession and reduced consumer spending. “In fact, what we’ve seen in the last few quarters is that customers are actually trading up, in terms of the devices they’re buying. the end products from Apple,” added Gleeson. The average price target of 41 analysts compiled by FactSet gives the stock a potential upside of 18%. Alphabet In contrast, Gleeson struck a more bearish tone on shares of Google-parent Alphabet. He expected the company to report “terrible” quarterly numbers and gave a “pretty bad” outlook for the first half of the year as the global economy slows. As the company looks to cut costs ahead of the recession, advertising – which is Alphabet’s most significant revenue source – is often one of the first expenses to be reduced. The fund manager also said a “dark cloud” is looming over the stock as regulators step up scrutiny of the tech giant’s dominance in the online advertising and search technology sectors. “Clearly, there is an increasing amount of regulatory oversight that takes place around Alphabet. And that will probably leave a dark cloud looming over them into the foreseeable future,” he said. Gleeson cautioned that talk of a breakup now would be premature, but added that if Alphabet were to restructure, the valuation would be higher. Analyst consensus price targets compiled by FactSet point to a 23% upside for the stock over the next 12 months. GOOGL 5Y line