Four big tech companies – Alphabet, Inc. (GOOG), Microsoft Corporation (MSFT), Meta Platforms, Inc. (META) and Amazon, Inc. (AMZN) – announced their quarterly results this week.

Now, I previewed the big techs’ earnings in last Saturday’s Market 360, so in today’s Market 360, let’s take a look at how the numbers came in. Then, I’ll share how to position your portfolio for profits.

Earnings Reviews

Alphabet, Inc. (GOOG) – Tuesday, April 25

Alphabet bested analysts’ expectations on Tuesday evening with its first-quarter earnings and sales. The company reported earnings of $1.17 per share and sales of $69.8 billion, down from earnings of $1.12 per share and revenue of $69.8 billion a year ago. Analysts were calling for earnings of $1.07 per share and $68.9 billion.

Digging a little deeper into the report… Alphabet noted ad revenue fell to $54.5 billion from $54.7 billion a year earlier. Google Cloud sales jumped 28% to $7.45 billion in the first quarter. CEO Sundar Pichai stated:

We are pleased with our business performance in the first quarter, with Search performing well and momentum in Cloud. We introduced important product updates anchored in deep computer science and AI. Our North Star is providing the most helpful answers for our users, and we see huge opportunities ahead, continuing our long track record of innovation.

GOOG shares jumped as much as 8% in after-hours trading on the heels of its earnings report but fell on Wednesday.

Microsoft Corporation (MSFT) – Tuesday, April 25

Microsoft released its earnings report for its third quarter in fiscal year 2023 after the closing bell on Tuesday.

The company reported earnings of $2.45 per share on revenue of $52.9 billion. This translates to 10% year-over-year earnings growth and 7% year-over-year revenue growth. Analysts were looking for earnings of $2.23 per share on revenue of $51.1 billion, so the company posted a 9% earnings surprise and a 3.4% revenue surprise.

The star of the show, however, was the strong performance from Microsoft’s Intelligent Cloud platform. Revenue for the cloud increased 16% to $22.1 billion, driven by Azure and other cloud services revenue growth. The company’s chairman and Chief Executive Officer Satya Nadella said:

The world’s most advanced AI models are coming together with the world’s most universal user interface – natural language – to create a new era of computing. Across the Microsoft Cloud, we are the platform of choice to help customers get the most value out of their digital spend and innovate for this next generation of AI.

MSFT shares climbed 7% on Wednesday following the results and broke to a new 52-week high on Friday.

Meta Platforms, Inc. (META) – Wednesday, April 26

Meta’s first-quarter revenue increased 3% year-over-year to $28.6 billion and also beat Wall Street consensus estimates for revenue of $27.65 billion. Meanwhile, earnings per share fell 19% year-over-year to $2.20 per share, down from earnings of $2.72 per share in the same quarter of last year. Analysts were calling for earnings of $2.03 per share. On a more positive note, daily active Facebook users rose 4% to 2.04 billion.

Also important to note: The company posted a nearly $4 billion operating loss in its Reality Labs segment. The Reality Labs include augmented and virtual reality related to consumer hardware, software and content. But that hasn’t deterred CEO Mark Zuckerberg. During the earnings call, Zuckerberg stated:

We had a good quarter and our community continues to grow. Our AI work is driving good results across our apps and business. We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision.

META shares surged more than 14% on Wednesday to a new 52-week high in the wake of the earnings and revenue surprises.

Amazon.com, Inc. (AMZN) – Thursday, April 27

For Amazon’s first quarter, it reported adjusted earnings of $0.31 per share, which came in above analysts’ estimates for earnings of $0.21 per share. Revenue rose 9% year-over-year to $127.4 billion, well above analysts’ projections for revenue of $124.5 billion. This compares to earnings of $0.38 per share and revenue of $116.4 billion in the same quarter of last year.

Additionally, Amazon Web Services (AWS) revenue increased 16% year-over-year to $21.4 billion, just above analysts’ estimates for $21.22 billion. In the company’s news release, CEO Andy Jassy said:

While our AWS business navigates companies spending more cautiously in this macro environment, we continue to prioritize building long-term customer relationships both by helping customers save money and enabling them to more easily leverage technologies like Large Language Models and Generative AI with our uniquely cost-effective machine learning chips (“Trainium” and “Inferentia”), managed Large Language Models (“Bedrock”), and AI code companion CodeWhisperer. We like the fundamentals we’re seeing in AWS, and believe there’s much growth ahead.

AMZN shares jumped as high as 10% in after-hours trading on Thursday in the wake of its earnings results. But on the earnings call, Chief Financial Officer Brian Olsavsky noted that “April revenue growth rates are 500 basis points lower than what we saw in Q1,” and investors got spooked. Due to this, shares ended Friday down more than 3%.

Earnings Are Working

Wall Street’s response to big techs’ earnings is good news, as it shows that earnings are working. In other words, the companies that are beating estimates are being propelled higher, while companies that miss expectations are falling.

While it’s great that the tech companies posted relatively strong results, I’m still very bullish on the energy sector.

On Friday, we also heard from Exxon Mobil Corporation (XOM), and the oil and gas giant smashed analysts’ earnings forecasts. It achieved quarterly earnings in excess of $10 billion for the fourth-straight quarter. First-quarter earnings more than doubled year-over-year to $11.43 billion, a new record for the company. Adjusted earnings per share rose 36.7% year-over-year to $2.83 per share, which topped analysts’ estimates for $2.59 per share.

Following the record results, XOM shares surged to a new 52-week high.

So, Exxon Mobil proved that it can still post record earnings with current oil prices – something Wall Street had worried about as crude oil prices remain volatile.

I further discussed why I remain positive on the energy sector in yesterday’s Growth Investor Monthly Issue for May. I also shared how to profit from chaos, and revealed three brand-new recommendations and my latest Top Stocks lists. (Click here to read my Monthly Issue while it’s still hot off the presses.)

If you’d like the names of my latest recommendations, simply click here to become a member of Growth Investor today. Once you do, you’ll have full access to my latest Monthly Issues, Weekly Updates, Special Market Podcasts and much more!

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Alphabet, Inc. (GOOG), Amazon, Inc. (AMZN), Exxon Mobil Corporation (XOM), Meta Platforms, Inc. (META) and Microsoft Corporation (MSFT)