Microsoft Cloud Growth Slows
And, Texas Instruments' weak demand.
Today is Wednesday, January 25, 2023.
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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.
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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)
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