Microsoft and Alphabet weigh on the Nasdaq

(AOF) – Microsoft lost 1.20% to $404.17 while Alphabet fell 6.11% to $143.70. Before the publication of their quarterly results last night, these two tech giants weighed nearly 5,000 billion dollars on the stock market, the result of an increase of more than 60% for Microsoft and more than 50% for the parent company of Google over a year. Displaying such performances, neither Microsoft nor Alphabet had any room for error. The former saw a slowdown in Azure’s growth, excluding AI’s contribution, while the latter’s advertising revenue disappointed.

In the second quarter, ended at the end of December, Microsoft saw its net profit jump 33% to $21.9 billion, or $2.93 per share. Revenue increased 18% to $62 billion. Analysts polled by Bloomberg anticipated $2.78 per share and $61.1 billion respectively.

“This is a record quarter, driven by the continued strength of the Microsoft Cloud, which exceeded $33 billion in revenue, up 24%. We have moved from a conversation about AI to an application of AI. “AI at scale,” said CEO Satya Nadella.

Azure powered by artificial intelligence

Driving force of the group in recent years, Azure (commercial cloud) has seen its sales increase by 30% in raw data. They are up 28% at constant exchange rates, as in the previous quarter. The Visible Alpha consensus stood at 27.7%.

Growth was supported by 6 points by artificial intelligence services, the company said at the press conference with analysts. Azure’s growth is expected to stabilize this quarter, the CFO said. As a negative point of this publication, UBS highlights that the growth of Azure has slowed, if the contribution of artificial intelligence is excluded. This observation is shared by JPMorgan.

Cloud loss smaller than expected for Alphabet

Over the last 3 months of 2023, Alphabet recorded net profit of $20.69 billion, or $1.64 per share, compared with net profit of $13.62 billion a year earlier. The Bloomberg consensus was for just $1.59.

The group’s turnover increased by 13% to $86.83 billion. It also increased by 13% at constant exchange rates. Its advertising revenues increased 11% to $65.52 billion, but Wall Street was targeting $66.1 billion, according to LSEG data.

The Cloud business saw revenue increase 25.6% to $9.19 billion. Growth accelerated compared to the previous quarter: 22.5%. It recorded an operating profit of $864 million this quarter compared to a loss of $186 million a year earlier. Wall Street expected a profit of only $427 million.

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