How Big Tech’s Earnings Season is Going So Far

Big Tech Stock Earnings

Last week, the five technology heavyweights, Meta (NASDAQ:FB), Alphabet (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) opened their books. This is important for the overall market because these five companies together account for nearly half of the weighting in the Nasdaq 100, and thus are largely responsible for the performance of the technology index.

Let’s take a closer look at three of these companies: 

Meta Posts Mixed Figures

On Monday, Meta, formerly Facebook, kicked off Big Tech earnings season. The social media company has recently been subject to massive criticism over its handling of COVID-19 misinformation and political disputes. This is probably one reason why the company is renaming itself. 

It has also grown beyond its flagship Facebook social network. Instagram, WhatsApp and Oculus, a manufacturer of virtual reality headsets, also belong to Meta.

Facebook was not completely convincing with its results. The revenue increased in the third quarter by 35% to $29 billion. However, analysts had expected $29.6 billion. Net income increased by 17% to $9.2 billion or $3.22 per share and was thus above the estimates of $3.19 per share. The company’s outlook also fell short of expectations.

Yesterday, the stock fell to its lowest level since mid-May and closed below the 200-day line, which is currently at around $320. In any case, it would be wise to wait and see if it can cross over this moving average in the next few days. If not, there is a threat of further losses in the short term.

Alphabet and Microsoft Post Compelling Big Tech Figures

In contrast, the Google parent company Alphabet (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT), which opened their books yesterday evening after the end of Wall Street trading, posted unambiguously positive figures. 

Alphabet increased sales by 41% to $65.1 billion. Net income made a 68% jump to $18.9 billion, or $27.99 per share. Analysts had only expected revenues of $63.4 billion and earnings of $23.37 per share.

Software giant Microsoft also beat analysts’ revenue expectations of $44.0 billion, with revenue rising 22% to $45.3 billion. Net income climbed 48% to $20.5 billion, or $2.71 per share. Even excluding a large tax credit, adjusted earnings of $2.27 per share were still well above analysts’ estimates of just $2.07 per share.

For both companies, the cloud business remains a growth driver. Alphabet increased revenues in this area by 45%, while Microsoft grew them by 50%.

Alphabet and Microsoft Continue to Look Promising

While Alphabet’s share price fell slightly in after-hours trading, Microsoft continued to gain and is trading at an all-time high. Here, the lights are green for further price increases.

The upward trend at Alphabet is still intact, and the chances of that upward trend continuing in the near future look good. Alphabet and Microsoft shares remain essential investments in the big tech sector.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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