This week, investors' attention is focused on the reports of large technology companies. Following Netflix and Tesla, Microsoft and Alphabet reported, Bloomberg writes.
Microsoft reported the strongest revenue growth in the last six quarters (up 13% to $56.5 billion, better than expected).
This was driven by accelerating growth in demand for cloud computing due to the demand for new AI tools: Azure segment revenue grew by 29% compared to 26% a quarter earlier.
The company's shares rose by 4% in the post-market.
On the contrary, the revenue and profit of Alphabet's cloud business did not meet analysts' expectations. This caused investors' concerns about the company's position in the market, which is crucial for its future growth, Bloomberg notes.
Shares fell by 6.1%, although the report was good overall: revenue was better than expected ($64 billion vs. $63 billion), as was net income ($1.55 vs. $1.45 per share).
This divergence in stock performance means that investors have begun to pay more attention to global indicators of (in)stability during the reporting season.
In recent weeks, the stock market has been moving on an all-or-nothing basis: stocks in the S&P 500 index have been rising and falling in sync, Bloomberg writes. They reacted to macroeconomics and geopolitics, not to news about individual companies.
Last week, Tesla and Netflix opened the reporting season, and the result was the opposite for them. Netflix's stock rose by as much as 16% the day after the report was released, while Tesla's shares, on the other hand, fell by 9%.
Background. As reported, Musk's words about the decline in demand for electric cars brought down Tesla shares.