Technology Stocks On The Roll

It is an exciting week as our favourite technology stocks release their key earnings. Overall, all technology stocks report a robust quarter with increase revenue amid a rosy spending pattern by consumers. As a result, the earnings generally exceed Wall Street’s estimates, although share prices do not reflect the rosy sentiments.

Let’s sink into the report cards.

Apple: Fire On all Cylinders

It was a blowout quarter for the iPhone makers, for its third-quarter result ended on June 30. Revenue was up 36% from a year ago to reach $81.4 billion, driven by strong demands for its iconic iPhones. This surpassed Wall Street’s estimate of $72.9 billion by a large margin of about $10 billion.

The company reported a profit of $1.30 per share, exceeding the $1 a share expectation. In particular, iPhones sales accounts for nearly 50% of the revenue, well ahead of the $34.2 billion estimates. In addition, growth remains strong across all product categories, such as in Mac, iPad, wearables, home and accessories, and not forgetting the new growth pole: services, as it ended the quarter with more than 700 million paid subscribers using its services portfolio. This is an increase of more than 150 million compared to the prior year.

From a geographical perspective, revenues were up across key regions, including America, Europe, Greater China, and Japan, with the rest of Asia growing by 28%. It was a solid quarter on the execution that infuses technology into the everyday life of consumers.

Nonetheless, there is the expectation of slowing growth in the next quarter ahead.

Alphabet: Reclaiming the Loss Ground

The company hit the jackpot in its record quarterly revenue. The net income was $18.5 billion, which is $27.26 a share. This is a sharp improvement from its net profit of $7 billion or $10.13 a stake in the prior year.

Revenue hit a high of $61.9 billion, well ahead of the $56.2 billion estimates. The healthy online activity spurred broad-based spending by advertisers as search, and other revenues account for $35.9 billion. In addition, YouTube ad revenue is a gem that contributes $7 billion to the revenue.

Interestingly, the traffic acquisition costs or TAC as commonly known is on the high side. This is the fee that Google typically pays to companies like Apple for the search deals, which amount to $10.9 billion.

While the company is expected to have a strong quarter, investors were concerned about a slowing advertising spending or even a reversal. Still, it does not seem the case in the company’s earning. Similarly to Apple, the numbers are terrific across most of the business segments.

In Particular, Pika World likes Google’s Cloud computing segment, which had a rise of 50%in revenue to reach $4.6 billion. It has a smaller operating loss of $591 million, which is a dramatic drop from $1.4 billion a year ago.

Overall, it was a splendid quarter!

Microsoft: An Upbeat Guidance Against Dark Clouds

The company posted revenue of $46.2 billion, a rise from $44.1 billion, a 21% increase. Profits stood at $2.17 per share, exceeding the consensus of $1.90 per share. In addition, the company had seen firmer growth across its three operating segments.

First, the Productivity and Business Processes that include Office were up 25% in revenue to hit $14.05 billion, ahead of the guidance of $13.8 billion.

Second, Intelligent Cloud Revenue, which includes the brand Azure, rose 30% to reach $17.4 billion, beating $16.2 billion. Notably, this business segment had exceeded the Productivity business segment.

Lastly, the Personal Computing segments, which includes the all-time favourite, Windows, Xbox and Surface, reached $14.1 billion in revenue, also ahead of the forecast range of $13.6 billion.

It has been a good ride for US Technology stocks for the earnings season!