Today is Wednesday, January 25, 2023.
New to this newsletter? Sign up here.
Microsoft Cloud Growth Slows
It was a mixed bag of financial results for Microsoft (Nasdaq: MSFT), which caused shares to decline by 1.01% in after-hours trading on Tuesday.
Financials: Microsoft reported earnings of $2.32 per share in the quarter, which was better than expected. But revenue came in at $52.7 billion, which was lower than expected.
Growth: In addition to the 2% increase in revenue from the same period last year, revenue for LinkedIn grew by 10%.
Cloudy: Azure and other cloud services grew by 31%, but that represents a slowdown in the category. Last quarter, cloud services grew by 35%. That means that growth for Microsoft’s cloud business has slowed.
Also: Revenue for personal computing dropped by 19%. The PC market seems to be shrinking. In fact, the net income for the entire company decreased by 7%.
Stock Price: Shares of Microsoft are down 16% in the last 12 months, which is better than most technology stocks. The stock is up 2% in the last 30 days.
Final Thoughts: While there’s a lot to like about Microsoft (including its investments in artificial intelligence), the slowing cloud business and decreasing PC market are big problems.
Notable Earnings Today: Tesla (Nasdaq: TSLA), Boeing (NYSE: BA), AT&T (NYSE: T), ServiceNow (NYSE: NOW), Progressive (NYSE: PGR), International Business Machines (NYSE: IBM), ASML (Nasdaq: ASML), Lam Research (Nasdaq: LRCX), Abbott Labs (NYSE: ABT), Steel Dynamics (Nasdaq: STLD), Freeport-McMoRan (NYSE: FCX), Crown Castle (NYSE: CCI), Nasdaq (Nasdaq: NDAQ), Wolfspeed (NYSE: WOLF), NextEra Energy (NYSE: NEE), NextEra Energy Partners (NYSE: NEP), Las Vegas Sands (NYSE: LVS), Hess (NYSE: HESS), CSX (Nasdaq: CSX), Automatic Data Processing (Nasdaq: ADP), Seagate Technology (Nasdaq: STX), Axalta Coating Systems (NYSE: AXTA), Boot Barn Holdings (NYSE: BOOT), Ethan Allen Interiors (NYSE: ETD), Flex (Nasdaq: FLEX), General Dynamics (NYSE: GD), Kimberly-Clark (NYSE: KMB), LendingClub (NYSE: LC), Levi Strauss (NYSE: LEVI), Norfolk Southern (NYSE: NSC), Packaging Corp of America (NYSE: PKG), Raymond James Financial (NYSE: RJF),SL Green Realty (NYSE: SLG), Textron (NYSE: TXT), U.S. Bancorp (NYSE: USB), United Rentals (NYSE: URI).
Notable IPOs Today: GENELUX CORP (Nasdaq: GNLX), Bridger Aerospace Group Holdings, Inc. Common Stock (Nasdaq: BAER), QuantaSing Group Limited American Depositary Shares (Nasdaq: QSG), AlphaVest Acquisition Corp Ordinary Shares (Nasdaq: ATMV).
Notable Equity Crowdfunding Campaigns Ending Today: N/A.
Notable Economic Events Today: Crude Oil Inventories (10:30 a.m. ET).
Texas Instruments Sees Weaker Demand
Texas Instruments (Nasdaq: TXN) posted mixed financial results on Tuesday, sending shares down 0.36% in after-hours trading.
Financials: Texas Instruments reported earnings of $2.13 per share and revenue of $4.67 billion; both were better than expected.
The Problem: Revenue decreased 11% year-over-year due to “weaker demand in all end markets” except for automotive.
Outlook: The company expects revenue to be between $4.17 billion to $4.53 billion in the quarter, which was below estimates.
Final Thoughts: The sales drop reflects poorly on Texas Instruments. The stock is up 1% in the past 12 months.
Intuitive Surgical Faces Covid Impact
Shares of Intuitive Surgical (Nasdaq: ISRG) dropped 9.1% in after-hours trading on Tuesday after posting disappointing financial results.
Final Thoughts: The company said it was impacted by the resurgence of COVID-19 in China.
Nova Bank (Sponsored)
Novo is the powerfully simple small business banking platform that's resetting expectations of small business banking. Complete with integrations to tools small business owners are already using like Stripe, Shopify, Square, and Quickbooks Online.
Trends to Watch
What’s Not in Your Wallet: Capital One Financial Corp. stock underperforms Tuesday when compared to competitors (Marketwatch)
Separated: Rupert Murdoch Backtracks on Plan to Merge Fox and News Corp (The New York Times)
Bullish: Crypto Whales are Adding These Cryptos to Their Holdings (Crypto News)
Rx-cited: Amazon launches a subscription prescription drug service (NBC News)
It’s About Time: Walmart to Raise Starting Hourly Wages to $14 From $12 (The Wall Street Journal)
Thank you for reading!
Forward to a friend and tell them to sign up here.
Want more investing tips? Listen to the podcast.
Show Your Support: Buy Me a Coffee.
Questions or comments? Hit reply to reach out.