By
Bena Ilyas
May 13th, 2024
Apart from good performance evident in the shares, Alphabet and Microsoft also managed to surpass growth predictions.
Alphabet Inc (NASDAQ: GOOGL) and Microsoft Corp (NASDAQ: MSFT) saw a record high in their shares on the 27th of October as the tech giants announced their fiscal quarter results, exceeding analysts’ expectations. As the shares rallied high, the tech-heavy Nasdaq Composite also jumped.
Google and Microsoft Rally to Record Highs on Better-Than-Analysts-Expectations Fiscal Quarter Earnings
In reaction to an impressive Q3 report, Alphabet stock climbed 5% to $2,924,35. With the increase, the company was almost at a $2 trillion market cap. Also, Microsoft stock added 4% to $323.17, rising to a market valuation of $2.43 trillion. At 2.43 trillion market cap, Microsoft was nearing the valuation of Apple Inc (NASDAQ: AAPL), which was at $2.46 trillion at the time of the gains.
At press time, Alphabet stock is at an extended-trading price of $2,930, after adding 0.19% in the last 24 hours over its previous close of $2,924.35. Also, the company has a market cap of $1.86 trillion. On the other hand, Microsoft is currently valued at $2.33 trillion. MSFT is at after-hours trading of $323.78.
Both Alphabet and Microsoft have seen their shares increasing over the past year and from Q1 through Q3. The technology giants are making waves despite the global economic meltdown caused by the pandemic. In the past year, Alphabet shares have grown 93.56%, while MSFT has added 57.86%. Additionally, both stocks have been recording gains since the year began. GOOGL is up 66.85% in its year-to-date record while MSFT is up 45.30%
Apart from good performance evident in the shares, Alphabet and Microsoft also managed to surpass growth predictions. Google said there was a 43% surge in advertising revenue, recording $53.1 billion as YouTube ad sales rose to $7.2 billion. A year before, YouTube ad sales were $5 billion. In addition, earnings per share were $27.99 in Q3, crossing analysts’ estimates of $23.48.
Google Escapes Bullets from Apple’s Privacy Features
Just as Twitter Inc (NYSE: TWTR) was able to dodge the bullets from Apple’s iOS privacy changes, Google was also unaffected. However, Snap Inc (NYSE: SNAP) and Facebook Inc (NASDAQ: FB) were hurt by the updated privacy features. Fortunately for Alphabet, the privacy features had a “modest impact on its ad profits, according to the company finance chief Ruth Porat.
An analyst at Barclays, Ross Sandler, who has a buy rating on GOOGL commented:
“The ad market remains strong, and unlike most digital peers, Google doesn’t seem to be negatively impacted by iOS 14 or supply chain issues. Longer-term Google remains the best positioned company in digital advertising and one of our favorite names.”
Similar to Alphabet, Microsoft also recorded impressive results for its fiscal quarter. Revenue advanced 22% year on year in its fiscal first quarter to $45.3 billion. At the same time earning came out better at $2.27, over analysts’ estimate of $2.07.
Speaking on the current quarter, Microsoft’s finance chief Amy Hood said that she is expecting the company’s gross margin to increase 2 percentage points. According to Hood, gross margin will improve as Microsoft advances its cloud businesses.