Analysts stand by Microsoft
Despite Microsoft’s muted guidance for the current quarter, most analysts covering the stock are standing with the tech giant.
Citi analyst Tyler Radke said Microsoft remains “best ranked” among large-cap software names, adding that it offers investors a good mix of growth and profitability. Keith Weiss of Morgan Stanley also maintained an Overweight rating on the stock.
Microsoft reported stronger-than-expected profit for last quarter, but its current-quarter guidance sent the stock down more than 2%.
Boeing, News Corp, AT&T among stocks making biggest moves premarket
Here are some of the companies making headlines before the bell:
boeing — Boeing stock fell nearly 1.7% premarket after the aircraft maker posted earnings and revenue that missed expectations despite improving demand. The company cited labor and supply shortages for the disappointing numbers.
news corporation, Fox News – Shares of News Corp and Fox News rose 4.9% and 1.8%, respectively, after Rupert Murdoch abandoned plans to merge the two companies, a proposal that met pushback from shareholders.
AT&T — Shares rose 1.8% after the telecommunications giant’s fourth-quarter report came out Wednesday that showed subscriber growth but forecast lower-than-expected annual profit.
Microsoft Microsoft shares fell nearly 3% after the software giant shared a disappointing revenue forecast for the current quarter. Tech bellwether topped earnings expectations but said new business growth slowed in December, including in its Azure segment.
Click here to read more about today’s early market movers.
– Piya Singh
Amazon shares fall as Bernstein cuts price target
Amazon shares declined nearly 3% premarket amid a price target cut by Bernstein analysts.
The firm cut its price target by $5 to $120 per share, representing a nearly 25% upside from Tuesday’s closing price.
“We remain comfortably above EBIT for 2023 as we view operating leverage as a matter of time, if not, but are tracking AWS’s outlook as MSFT … performed well this quarter did but the guide was weak,” said analyst Nikhil Devnani in a Wednesday note to clients.
Meanwhile, Bank of America analyst Justin Post shared concern about the company’s Amazon Web Services division’s earnings growth. He cited Microsoft’s recent Azure guidance as an indicator of declining cloud spending.
“We think it will take a few more quarters to digest cloud spending growth in the pandemic era, but with a larger total market and healthy innovation, industry growth could accelerate in 2024,” he said in a Tuesday note. “
AT&T earnings up
Shares of AT&T rose more than 2% before the bell despite posting mixed quarterly results.
The telecom giant beat earnings estimates by 4 cents per share, although revenue came in slightly short of the $31.39 billion analysts were expecting.
Boeing declines on earnings miss
Boeing shares fell 4% before the bell after fourth-quarter earnings fell short of estimates for both the top and bottom lines amid labor and supply shortages.
The aircraft maker posted an unexpected loss of $1.75 per share on $19.98 billion in revenue. Analysts had expected earnings of 26 cents per share on revenue of $20.38 billion.
Despite top- and bottom-line misses, Boeing generated free cash flow last year for the first time since 2018.
Boeing falls on earnings miss
– Leslie Josephs, Samantha Subin
Mortgage interest rates have declined for the third week in a row
Weekly mortgage demand surged last week as rates declined for a third consecutive period.
Total application volume increased 7% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
At the same time, rates fell to their lowest level since September, with loan balances falling from 6.23% to 6.2%, in line with the average contract interest rate for a 30-year fixed-rate mortgage.
– Diana Olick, Samantha Subin
Spontaneous surgical fall after loss of earnings
Shares of Intuitive Surgical fell nearly 9% in the premarket after the company reported weaker-than-expected quarterly results.
Sahaj Surgical earned $1.23 per share on revenue of $1.66 billion. Analysts polled by Refinitiv expected profit of $1.25 per share on revenue of $1.67 billion. The company cited the re-emergence of Covid cases in China, which has hurt the volume of processes in the region.
ISRG falls after earnings
Microsoft shares fall, turn negative after after-hours gain
Microsoft shares were down about 1% in after-hours trading, reversing earlier gains.
Shares were initially higher after the company posted quarterly earnings per share that beat Street expectations. However, investor sentiment soured after Microsoft issued disappointing guidance for revenue in the current quarter on its earnings conference call.
The company forecast $50.5 billion to $51.5 billion in fiscal third-quarter revenue, while analysts polled by Refinitiv estimated $52.43 billion.
Read more about Microsoft’s results here.
,Darla Mercado, Jordan Novett
Morgan Stanley’s Mike Wilson Expects Earnings to Begin on Weak Consumer
Mike Wilson of Morgan Stanley said investors should prepare for tough times ahead.
“The numbers are really going to come down in a way that we didn’t think would happen in Q4, but now, we think it’s happening,” Wilson said Tuesday on CNBC’s “Closing Bell: Overtime.” ” ,
The investment strategist said he expects earnings to start falling as companies deal with a weaker consumer.
Still, he is open to changing his outlook if he doesn’t see a “more meaningful” decline in the next three or four months, or by April.
“We’ll probably retract our call, … because we’re still somewhat in a world of financial repression, and bonds aren’t necessarily a great option for the long term, and stocks are likely to play a higher side in town.” It’s kind of an inflationary environment,” he said. “We’re not ready to make that call today because we think the risk reward is disproportionate.”
Microsoft shares soar after earnings results show resilience in the cloud
Shares of Microsoft led the gains in after-hours trading, rising more than 4% after its quarterly results topped and bottom lines above estimates. The stronger-than-expected report was driven by strong growth in its cloud unit.
Revenue in Microsoft’s Intelligent Cloud segment rose 18% to $21.51 billion. Meanwhile, sales of Azure and other cloud services, which Microsoft doesn’t report in dollars, rose 31%.