Mixed results for Magnificent 7
Despite predominantly positive earnings reports, reporting on the “Magnificent Seven” of mega-cap technology stocks has develop into inconsistent.
Microsoft shares On Tuesday, the corporate sold off regardless that it narrowly beat Wall Street’s expectations for its fourth-quarter results and comfortably beat last 12 months’s results. Investors have been particularly scrutinizing the numbers for AI activities; Microsoft’s Intelligent Cloud revenue rose 19% 12 months over 12 months, contributing 8 percentage points to the expansion of its Azure and other cloud services revenue, which grew 29%. Evidently, that wasn’t enough.
Facebook and Instagram owners Meta-platformsOn the opposite hand, Meta easily beat analyst forecasts for the second quarter. The company increased net profit by 73% in comparison with the identical quarter last 12 months and is gaining market share within the promoting sector against arch-rival Alphabet. Compared to its Mag 7 peers, Meta has been a stock market laggard since 2022, but has launched a price and job cutting campaign that now appears to be paying off.
Apple The company also exceeded expectations when it comes to sales and profits. The company recorded particularly strong ends in the iPhone and iPad segments. Cloud services, computers and wearables were inside estimates.
Amazon was punished after it missed analyst consensus on revenue despite beating earnings estimates. Although Amazon Web Services performed strongly, the corporate’s core businesses in retail and promoting disenchanted.
Result highlights from Microsoft, Meta, Apple and Amazon
The currency information on this section is in USD.
- Microsoft (MSFT/NASDAQ): Earnings per share of 2,95 € (versus a forecast of $2.94). Revenue of $64.7 billion (versus an estimated $64.5 billion).
- Meta Platforms (META/NASDAQ): Earnings per share of $5.16 (versus an expected $4.63). Revenue of $39.07 billion (versus an estimated $38.31 billion).
- Apple (AAPL/NASDAQ): Earnings per share of 1,40 € (versus an expected $1.35). Revenue of $85.78 billion (versus an estimated $84.53 billion).
- Amazon (AMZN/NASDAQ): Earnings per share of $1.26 (versus an expected $1.03). Revenue of $147.98 billion (versus an estimated $148.56 billion).
The US Federal Reserve stays unchanged for now
There were no assassinations this week, nor were any presidential candidates withdrawn from the race for the White House, however the news from Washington DC on Wednesday was followed just as closely by the markets.
The US Federal Reserve decided to maintain its overnight rate of interest at 5.5%. opinionThe central bank’s Open Market Committee acknowledged signs of an economic slowdown but said it could not cut rates of interest “until it has greater confidence that inflation is moving sustainably toward 2%.” The market continues to bet on a rate cut in September, the primary since 2020.
This puts the Bank of Canada, which has been cutting rates of interest for the past two months, a full percentage point below the US Federal Reserve. The Canadian dollar nevertheless rose barely against the greenback after the announcement, closing at USD 0.72485, suggesting that the monetary policy decision was expected.
