Microsoft and Alphabet report tonight: what the market expects
In short
- Microsoft and Alphabet publish quarterly results tonight after the New York close.
- Microsoft is expected to earn $4.72 a share on revenue of $90.68bn; Alphabet about $3.02 a share on about $128bn.
- Options imply a move of about ±4.7% for Microsoft and about ±5.3% for Alphabet after the reports.
Two of the world’s largest companies report tonight – on the same day the Federal Reserve announces its rate decision. That makes Wednesday the busiest day of the month on Wall Street.
What is expected
According to Yahoo Finance, analysts expect Microsoft to earn $4.72 a share on revenue of $90.68bn, up from $4.13 and $77.67bn a year ago. The market will focus on the Azure cloud business and on whether spending on artificial intelligence is turning into revenue.
For Alphabet, Google’s parent company, expectations are about $3.02 a share on about $128bn of revenue. The focus is search advertising, YouTube and Google Cloud.
Where the shares stand
According to HawkValue data, Microsoft is at $527.66, down 2.7% over a year. Alphabet is at $324.93, up 21.5% over a year. The broad market is near its highs: the S&P 500 is at 7,738.8 points and the Nasdaq 100 at 29,700.5. All quotes are on our stocks page.
What it means for you
Options price in a move of about ±4.7% for Microsoft – $527.66 a share, a move of roughly ±$24.80. For Alphabet the expected move is about ±5.3%, about ±$17.20 a share from $324.93.
The maths: $1,000 in Microsoft could become $953 or $1,047 on a normal earnings day – before any surprise from the Fed a few hours earlier.
If you own an index fund, you hold both: they are among the largest companies in the S&P 500 and the Nasdaq 100, so big moves in them shift the whole index.
Bottom line
Both companies are expected to grow profits from a year ago. The market will judge not only the numbers but the outlook for artificial intelligence. Options show that a move of about 5% either way is a normal scenario for tomorrow.
Sources: Yahoo Finance · Investing.com
For information only. This is not investment advice.
