MSFT - Wall Street Breakfast Podcast: Alphabet Dips Microsoft Jumps
2023-10-25 06:38:56 ET
Summary
- Alphabet dips as Cloud revenue disappoints.
- Microsoft's Q1 results tops expectations.
- UFC is reportedly replacing Modelo with Bud Light in its largest-ever sponsorship deal.
Listen below or on the go on Apple Podcasts and Spotify
Alphabet ( GOOG ) ( GOOGL ) dips as Cloud revenue disappoints despite strong overall growth. (00:21) Microsoft ( MSFT ) jumps as Q1 results top expectations, aided by Azure growth . (01:30) UFC taps Anheuser-Busch InBev ( BUD ) in largest-ever sponsorship deal - report. (02:39)
This is an abridged transcript of the podcast.
Alphabet is down 6% in premarket action -- (NASDAQ: GOOG ) (NASDAQ: GOOGL )-- despite the company beating earnings expectations on top and bottom lines with its best revenue growth in five quarters.
Revenues grew 11% to $76.69B. Revenues also gained 11% in constant currency. But revenues in Google's Cloud unit did not grow as fast as expected -- the company's only segment that did not beat Street consensus.
Operating income jumped to $21.34B from a year-ago $17.14B.
And net income jumped to $19.69B from a year-ago $13.91B. Earnings per share of $1.55 easily topped consensus for $1.45.
"I’m pleased with our financial results and our product momentum this quarter, with AI-driven innovations across Search, YouTube, Cloud, our Pixel devices and more," CEO Sundar Pichai said. "We’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come."
Alphabet also said it was taking action to optimize its office space worldwide.
Microsoft (NASDAQ: MSFT ) is up more than 3% premarket after the tech giant posted fiscal first-quarter results that topped expectations, aided by strong growth in its Azure cloud.
For the period ending September 30, Microsoft ( MSFT ) earned $2.99 per share on $56.52B in revenue.
Microsoft generated $24.26B in revenue from its intelligent cloud unit and $18.59B from its productivity unit.
Microsoft said that cloud services revenue, which is mostly comprised of Azure, grew 29%, or 28% year-over-year in constant currency.
Microsoft has been spending heavily to boost its Bing search engine, via advancements in artificial intelligence and its partnership with ChatGPT creator OpenAI.
The company returned $9.1B to shareholders during the period in the form of buybacks and dividends.
Wedbush Securities analyst Dan Ives, who has an outperform rating and $400 price target on Microsoft, said the results were a "home run."
UFC is saying goodbye to Constellation Brands' ( STZ ) Modelo as its beer sponsor , replacing it with Anheuser-Busch InBev's ( BUD ) Bud Light.
This is the mixed martial arts company's largest-ever sponsorship deal.
Bloomberg reported that the multi-year deal is set to begin in January 2024. While the amount of the arrangement was not disclosed, the news service said it would surpass the $175M deal with Crypto.com -- UFC's biggest sponsorship deal in the past.
Bloomberg said Bud Light would be integrated into UFC’s live events in the U.S., as well as at press conferences and weigh-ins.
Bud Light sales have been in a slump since earlier this year due to backlash over a controversial ad campaign featuring trans influencer Dylan Mulvaney.
Other articles to look out for on Seeking Alpha:
Apple's China risks are real and rising: Bank of America
Earnings misses are being punished a lot more than beats are being rewarded
BlackRock to pay $2.5M to settle SEC order on an investment description
On our catalyst watch for the day,
U.S. stocks on Tuesday ended higher.
The Nasdaq ( COMP.IND ) advanced 0.93%. The S&P 500 ( SP500 ) rose 0.73%, while the Dow ( DJI ) added 0.62%.
Ten of the 11 sectors ended in positive territory. Energy was the exception. Utilities and Communication Services topped the gainers.
The 10-year yield ( US10Y ) was down 2 basis points to 4.82%. The 2-year yield ( US2Y ) was up 4 basis points to 5.10%.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are mixed. The Dow is up 0.04%, the S&P 500 is down 0.4% and the Nasdaq is down 0.7%. Crude oil is down 0.1% at more than $83 a barrel. Bitcoin is down 1% and above 34,000.
In the world markets, the FTSE 100 is up 0.03% and the DAX is down 0.2%.
The biggest movers for the day premarket: Stride (NYSE: LRN ) is up 10% after the company exceeded expectations in Q1 results and provided an upbeat outlook. And Alphatec Holdings (NASDAQ: ATEC ) is down 14% following the announcement of an underwritten public offering of 14.3M shares of its common stock at $10.50 per share.
On today’s economic calendar,
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10am new home sales
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Wall Street Breakfast Podcast: Alphabet Dips, Microsoft Jumps