Technology stocks are on the rock, with Alphabet and Microsoft kicking off the earnings season with a wild card. Both companies met earnings expectations, but investors needed to be convinced about the future growth.
🥁Microsoft: Rosy prospect and strong outlook 🖨
CEO Satya did not provide any numbers on the revenue for the recently launched AI Copilot software that adds to its productive tools, 365 Office application suite. However, he offered a review of how people use the application.
Then comes the guidance. We see rosy guidance and forecasts point to strength in its Cloud business. It expects Azure’s growth for the quarter to be similar to the 28% growth seen in December, which is 1% higher than Wall Street’s expectations.
The Intelligent Cloud unit, which encompasses Azue, is expected to see revenue around $26.3 billion, ahead of the consensus estimate of $25.9 billion.
Other business segments, such as personal computing, productivity, and business process, saw stable growth ahead, and a capital spending increase is likely for the March quarter.
It has robust earnings and a healthy outlook, allowing the stock to pare its initial losses after hours.
📱Alphabet: Earnings beat, but advertising weakens🎲
Shares of the search engine giant delivered decent earnings, but the advertising growth points to a sense of weakness as it comes slightly below estimates. The weaker ad sales point to possible trouble ahead for other tech companies, and Meta Platforms fell sharply in the after-hour in sympathy with Alphabet’s result.
We might see a more challenging environment in the wider digital ad environment.
📪What’s on the menu today?📖
1) At 9.15 pm, we will have the ADP Nonfarm Employment.
2) Chicago PMI data will be released at 10.45 pm/
3) From 2 am to 2.30 am, we will release the FOMC meeting updates. There are two parameters which we will look out for.
First, we need to understand the possibility of the Fed interest rate pivot, when it might cut rates. Any pushback or hawkish tone will put pressure on stocks.
Second, we need to hear from Uncle Powell if there are plans to taper the quantitative tightening policy going on in autopilot mode in the background. Investors might cheer if there are discussions on reducing some tapering levels.
4) Amid all significant economic data, the Treasury Department will also share information on the mix of Treasury issuance to fund government expenditure. Given the recent weak Treasury auction for the 5-year and 7-year series, this will be much in focus.
It is 31 Jan, Wednesday, 9 am in Singapore and 9 pm in New York. It is a mega day of the week, and we hope all friends of Pika World have a safe trading week.
Reporting live,
Pss. We expect a possibility of mega movement in the S&P 500 based on history that could go beyond 50 points movement, won’t be surprised if a 100 points movement is registered. Do trade with care, too. More will be shared in our trading channel.
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