Alphabet & Microsoft Earn High Profits, Why Shares On Wall Street Can Fall?


 Based on indications from Wall Street, both Alphabet and Microsoft reported earnings that exceeded estimates. However, their shares fell in today's trading session.

From an investor's point of view, stock movements are set according to the limits of perfection. Alphabet shares are up 56% this year and hit a recent high last week. It surpassed the previous record at the end of 2021 at the time of technological progress.

Microsoft, on the other hand, is up 70% in 12 months to a recent high and has overtaken Apple as the most valuable public company.

These two companies began to gain a surge in the market after implementing the use of artificial intelligence (AI) and received positive support from their shareholders due to cost-saving efforts and drastic elimination of thousands of jobs.

Ahead of their earnings report week, investors who bought shares of both groups had high hopes. However, many of them were disappointed after the movement on Wall Street showed a fall.

On Tuesday, Alphabet reported 13% revenue growth, the fastest since the start of 2022. Sales of $86.31 billion beat the average estimate of $85.33 billion. Profit per share was $1.64 above the estimate of 5 cents.

Microsoft's revenue rose by 18% to $62.02 billion, exceeding the average estimate of $61.12 billion. Earnings per share were $2.93 above consensus by 15 cents.

Both companies also exceeded expectations in their businesses with Google Cloud reporting 25% growth and Microsoft's Azure and other larger cloud services growing 30%.

However, Alphabet is having trouble advertising on Google. According to Stifel's analysis, Alphabet produces healthy but still insufficient advertising.

Brian Wieser, an analyst at Madison and Wall noted that the market has unrealistic expectations of Google based on its size and dominance.