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w/c 24th June - a relatively light data week, with spotlight on US GDP and Durable Goods Wednesday, then the Fed’s preferred inflation measure, the MoM and YoY PCE data on Friday

Microsoft and Alphabet Earnings – January 30th 2024

Intermediate

Update 31/01/2024: Microsoft’s 2023 Q4 earnings call, released on January 30th, 2024, showcased a robust financial performance for the tech giant. According to data from investing.com, Microsoft reported an earnings per share (EPS) of $2.93, surpassing the forecasted EPS of $2.78. The company’s revenue for the quarter reached $62 billion, slightly exceeding the predicted revenue of $61.1 billion. 

These positive figures reflect Microsoft’s continued strength in the technology sector, driven by its diverse portfolio of software, cloud services, and devices. The earnings call highlighted Microsoft’s ability to navigate the dynamic market landscape and capitalise on evolving technological trends. Investors and industry observers keenly analysed these results, emphasising Microsoft’s pivotal role in shaping the trajectory of the technology industry.

Alphabet’s 2023 Q4 earnings release on the same day was also strong, slightly exceeding expectations. As reported by investing.com, Alphabet exceeded expectations with an EPS of $1.64, outpacing the forecasted EPS of $1.59. The company’s revenue for the quarter amounted to $86.31 billion, surpassing the predicted revenue of $85.23 billion. 

These impressive financial results underscore Alphabet’s significant presence in the technology sector, particularly through its diverse portfolio, including Google and other subsidiaries. Investors closely scrutinised these figures, recognizing Alphabet’s continued growth and influence in the ever-evolving tech landscape.

The below was written prior to the respective earnings calls.

As the US 2023 Q4 earnings releases continue, we enter a huge week, kicked off by Microsoft and Google Tuesday. Later in the week we will see Mastercard Wednesday, Apple and Amazon on Thursday and Exxon Mobil Friday. Markets will focus on these companies’ earnings reports and react to the crucial data with stock rises and falls. The best way to track these releases is on an economic calendar

What are Earnings Releases?

First let’s clarify what earnings releases are and their importance. They are pivotal moments for publicly traded companies, providing a comprehensive snapshot of their financial performance during a specific period. Typically issued on a quarterly basis, these reports offer detailed insights into a company’s revenue, profitability, expenses, and overall operational health. They serve as a crucial communication tool between companies and their shareholders, analysts, and the broader financial community. Investors closely monitor earnings releases to gauge a company’s success, growth prospects, and overall stability. 

Key financial metrics such as earnings per share (EPS), revenue, and net income are scrutinised to assess the company’s ability to generate profits and sustain its operations. Beyond the numbers, earnings releases often include management commentary, strategic updates, and forward-looking guidance, providing stakeholders with a holistic understanding of a company’s past performance and its anticipated trajectory. As such, earnings releases play a central role in shaping investor sentiment, influencing stock prices as people trade the news, and contributing to the broader dynamics of financial markets.

Why are Microsoft’s Earnings so Important?

Founded in 1975 by Bill Gates and Paul Allen, Microsoft Corporation has evolved into a global technology juggernaut, recognized for its software products, cloud solutions, devices, and services. Boasting a diverse portfolio encompassing Windows OS, Office software, Azure cloud, Xbox consoles, and Surface devices, Microsoft is deeply ingrained in personal and professional computing worldwide.

Microsoft

The importance of Microsoft’s earnings releases stems from its influential position in the technology sector, serving as a key indicator of the industry’s health and direction. Investors scrutinise these reports for insights into revenue streams, profit margins, and growth strategies. As a major player in cloud computing and emerging technologies, Microsoft’s financial performance not only reflects its individual success but also mirrors broader trends in the tech market. 

Additionally, being a key Dow 30 component with significant market capitalization of $3 trillion, Microsoft’s performance significantly impacts major stock indices, such as the Dow Jones Industrial Average and the Nasdaq Composite. The company’s consistent innovation and leadership in cloud services contribute to the anticipation surrounding its earnings reports, making them crucial events watched closely by investors, analysts, and industry observers.

What to expect from Microsoft’s Earnings

As the anticipation builds for Microsoft’s upcoming Q4 earnings report on January 30th 2024, analysts are closely eyeing the forecasted figures for the fourth quarter. Projections suggest an earnings per share (EPS) of $2.29 and a revenue forecast of $52.942 billion, according to investing.com. In the previous quarter, Microsoft exceeded expectations with an EPS of $2.99 against a forecasted $2.65, though revenue slightly fell short at $56.52 billion compared to an expected $54.55 billion. 

These figures provide a snapshot of Microsoft’s financial performance, and investors are eager to assess the company’s ability to sustain growth, especially amid evolving market dynamics and its prominent role in areas like cloud computing and emerging technologies. The upcoming earnings report is poised to be a pivotal event, influencing not only Microsoft’s standing but also providing insights into broader trends within the technology sector.

Why are Alphabet’s Earnings so Important?

Alphabet Inc., the parent company of Google, stands as a technological juggernaut founded in 1998 by Larry Page and Sergey Brin. Renowned for its dominance in online search and advertising, Alphabet has expanded its influence across a diverse array of tech-related ventures. Google, the primary subsidiary under Alphabet, is a household name and a key player in internet services, cloud computing, software development, and hardware products. With an expansive portfolio including the Android operating system, YouTube, Google Cloud, and numerous other services, Alphabet is deeply ingrained in global digital infrastructure.

Google

The significance of Alphabet’s earnings releases is underscored by its pivotal role in shaping the digital landscape. As one of the most valuable companies globally, Alphabet’s financial performance serves as a bellwether for the technology sector. Investors closely scrutinise its earnings reports to glean insights into advertising trends, user engagement, and the success of its various business segments. 

Google’s dominance in online advertising, search, and mobile operating systems amplifies the impact of Alphabet’s financial results on the broader market. Given its strategic investments in emerging technologies, such as artificial intelligence and autonomous vehicles, Alphabet’s earnings releases are crucial for gauging not only its individual performance but also broader industry trends and the direction of the digital economy.

What to expect from Alphabet’s Earnings

Alphabet Inc., with its current market cap standing at $1.91 trillion, is gearing up for its upcoming earnings report on Tuesday, with substantial expectations from investors. Analysts forecast an earnings per share (EPS) of $1.59 and revenue of $85.23 billion for the fourth quarter, reflecting the company’s robust standing in the tech industry. The previous quarter saw Alphabet exceed expectations with an EPS of $1.55 and revenue of $76.69 billion, surpassing the forecasted figures of $1.45 EPS and $75.73 billion in revenue. 

As Google’s parent company, Alphabet’s earnings reports are closely monitored by investors, given its substantial market cap and influential position in various tech sectors, from online advertising to cloud services. The recent 9% climb in GOOGL stock heading into the earnings report underscores the market’s anticipation, with the stock registering an impressive 58% rise throughout 2023, although major tech counterparts like Meta Platforms, Amazon.com, and Netflix did better. The upcoming earnings release is poised to offer valuable insights into Alphabet’s financial health, advertising trends, and potential indications for the broader tech market.

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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