An intense week of business results, especially from large technology companies, which is focusing the attention of investors. After the figures of tesla (NASDAQ:TSLA) and Meta (NASDAQ:META), this Thursday comes the turn of Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT).
In the premarket of Wall StreetGoogle falls 4.1% while Microsoft gives up more than 2%.
Alphabet hopes to dispel doubts about its delay in AI
“The online advertising giant Alphabet, valued at 2 billion dollars, will present its results on Thursday after the market closes. The owner of Google Search and YouTube is expected to post double-digit sales growth and a 30% profit increase as it seeks to allay concerns that it is falling behind in the crucial AI race. “explains Ben Laidler, global markets strategist at eToro.
“A key point will be the acceleration of 10% growth in sales of its huge online advertising business, which failed to meet high expectations last quarter. “The strong 25% growth in its cloud business will also be in focus, along with its ability to manage the high costs of competing in AI with peers such as Microsoft and Meta,” adds Laidler.
According to this expert, “lThe stock has appreciated almost 50% in the last yearmore than double that of the S&P 500 index. But its forward price/earnings valuation is an unambitious 22 times, only a modest premium to the S&P 500, and below its own long-term average, reflecting the doubts about whether it is a winner or loser in AI.
Microsoft: great expectations for the largest company in the world
“It is expected that Microsoft record a strong 15% increase in sales and profits compared to last year, while relying on its ability to monetize its advantage as a pioneer in AI, supported by its participation in the pioneer Chat-GPT,” highlights Laidler.
“Investor attention will focus on its Azure cloud business, its largest with 40% of sales and second globally after Amazon’s (NASDAQ:AMZN) AWS. It will be interesting to see to what extent its AI Copilot tools are helping monetization and growth effortsand investors will also be sensitive to the extent to which AI investments and costs are holding back profit margins,” adds the eToro analyst.
“The greatest of the so-called Seven magnificent ones revalued by 43% in the last year, almost double that of the overall S&P 500 index. This has raised investor expectations and pushed its price/earnings valuation to more than 30 times, well above the average and close to 20-year highs,” concludes Laidler.
Source: Ambito
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