🏠 Big Tech Earnings SZN
Alphabet, Microsoft, and Snap check in
Gm. The season of my city’s Phillies ended yesterday. Hearts were broken, tears were shed, and every store in center city rejoiced. If you’re a Phillies fan, how are you feeling? And if you’re a baseball fan in general, who do you think is taking the World Series, the Diamondbacks or the Rangers? Reply and let me know.
Big Tech Checks In
It’s that time of the year again: big tech earnings season.
First up are Microsoft, Snap, and Alphabet, and they all logged pretty strong quarters.
As the kids say these days, Microsoft went absolutely stupid last quarter:
Revenue of $56.5B vs $54.5B expected.
EPS of $2.99 vs $2.66 expected.
Cloud revenue of $24.3B vs $23.6B expected.
On and on it goes like that.
Clearly Wall Street is pleased with Microsoft’s earnings, investments into AI, and acquisition of Activision Blizzard, as shares jumped about 4%.
Everyone’s favorite picture-sending app with the really annoying AI chatbot also put in a good quarter:
EPS of 2 cents vs negative 4 cents expected.
Revenue of $1.19B vs $1.11B expected.
Global Daily Active Users of 406M vs 405.7M expected.
Five million subscribers for Snap+ compared to four million the prior quarter.
Although there was a lot to like, concerns over advertising dollars drying up following the latest Middle East development led to the stock staying relatively flat.
The fightin’ Sundar Pichai’s also recorded a good quarter…with one big exception:
EPS of $1.55 vs $1.45 expected.
Revenue of $76.69B vs $75.97B expected.
Advertising revenue of $59.96B, up from $54.48B last year.
Cloud revenue of $8.41B, missing the expected mark of $8.64B.
That cloud miss has got investors spooked, as cloud services are becoming increasingly important in our world of heavy AI workloads. Microsoft’s Azure and Amazon’s Web Services currently dominate this market, but Google has been making concerted efforts to catch up.
Obviously they still have a ways to go, and investors punished them with a drop in after-hours trading.
The Big Picture: The big tech comeback continues.
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Rabbit hole: Parallel Bets, Microsoft, and AI Strategies (Matthew Ball)
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