Market Overview - Stocks closed flat after the Fed's decision, with the Dow up 12 points or 0.03% [1] - The NASDAQ closed up 17 basis points, while the S&P 500 slid into the red, avoiding a record closing high [2] - The Russell 2000 closed down about 0.5% after an initial green start [2] Sector Performance - Technology and energy sectors outperformed, both up approximately 0.7% [3] - Consumer staples and real estate sectors led the decline, each down about 1% [3] - Healthcare sector also saw a decline of about 0.75% [4] Company Earnings Meta - Meta reported Q4 EPS of $8.88, with topline revenue of $59.89 billion, exceeding consensus of $58.42 billion [9] - Q4 ad revenue was $58.14 billion, surpassing the expected $56.79 billion [9] - For Q1, Meta forecasts revenue between $53.5 billion to $56.5 billion, above the street estimate of $51.27 billion [9] - Meta's capex for 2026 is projected between $115 billion to $135 billion, higher than the street's estimate of $110.6 billion [10] - Initial market reaction saw Meta's stock down nearly 3% despite strong revenue growth [10] - Analysts remain bullish, with over 90% rating it a buy, citing industry-leading revenue growth and scale advantages [11] Microsoft - Microsoft reported Q2 earnings that beat expectations, but shares fell 6% due to unclear reasons [20] - The company met expectations for its commercial cloud business, but personal computing revenues were in line, leading to a pullback [20] - Microsoft has remaining performance obligations above $600 billion, indicating future revenue [22] - Concerns exist regarding Microsoft's role in AI and its impact on the software business [28][30] Tesla - Tesla's Q4 EPS was $0.50, beating the consensus of $0.45 [22] - Q4 revenue was $24.90 billion, slightly below the estimate of $25.11 billion [22] - Gross margins were reported at 20.1%, exceeding the expected 17.1% [23] - Tesla's free cash flow was $1.42 billion, below the street's estimate of $1.59 billion [23] - The company is focusing on humanoid robots, projecting significant profit potential in the future [24][25] Investment Insights - Meta's long-term growth strategy is supported by its significant investments in AI and infrastructure, with a focus on revenue growth over short-term earnings [42] - Analysts suggest that Meta's current valuation at 18 times forward earnings is attractive given its growth prospects [42] - Microsoft faces challenges in maintaining its software business amidst rising AI competition, but its core products remain essential for data storage and access [30] - Tesla's future profitability is expected to be driven more by its robotics division than its electric vehicle sales, indicating a shift in its business model [25]

Core Insights - Microsoft reported strong financial results for the second quarter, exceeding Wall Street expectations with a revenue growth of 17% and operating income growth of 21% in constant currency [4] Financial Performance - Microsoft Cloud revenue surpassed $50 billion for the first time, growing 26% and 24% in constant currency [4] - Commercial bookings increased by 230% year over year, driven by Azure commitments from OpenAI and Anthropic [3][6] - Capital expenditure on computing and datacenter infrastructure reached a record $37.5 billion [3] Product and Market Developments - The launch of the GitHub Copilot software development kit and the new Maia 200 AI chip were highlighted as significant developments in the AI coding tools market [2][7] - Azure and other cloud services revenue grew 39% and 38% in constant currency, indicating strong demand for larger and more complex workloads [6] - Microsoft 365 commercial cloud revenue grew 17% and 14% in constant currency, reflecting strong performance from Copilot [6] Strategic Focus - The company is focused on expanding its market share in areas with a growing total addressable market (TAM) [2][7] - Investments in GPUs, CPUs, and datacenter infrastructure are aimed at supporting growing Azure demand and enhancing product innovation [6]

Core Viewpoint - Microsoft reported strong second-quarter earnings, exceeding Wall Street expectations, but its stock fell over 3% due to concerns about rising costs associated with AI investments [1][2][14]. Financial Performance - Microsoft posted earnings per share of $5.16 on revenue of $81.27 billion, surpassing analyst estimates of $3.92 in EPS and $80.3 billion in revenue [3][15]. - Cloud revenue reached $51.5 billion, marking a significant increase from $40.9 billion a year earlier [3][15]. Segment Performance - The Intelligent Cloud segment, including Azure, generated $32.9 billion in revenue, exceeding expectations of $32.2 billion [7][16]. - Productivity and Business Processes revenue, which includes Microsoft 365, came in at $34.1 billion, also above Wall Street estimates [7][16]. - The More Personal Computing segment, which includes Windows, Surface, and Xbox, generated $14.3 billion in revenue, matching expectations [8][16]. AI Business Insights - CEO Satya Nadella highlighted the growth of Microsoft's AI business, stating it is larger than some of the company's biggest franchises [4][16]. - The company's remaining performance obligations, a key indicator of future revenue, rose to $625 billion, with approximately 45% linked to OpenAI commitments [10][16]. Future Outlook - Microsoft faces AI capacity constraints, with demand for AI services exceeding supply, which is limiting near-term revenue [11][16]. - CFO Amy Hood indicated that capital expenditures are expected to increase in fiscal 2026 beyond last year's $88.2 billion [12][16]. - Despite being a major beneficiary of the AI surge, Microsoft’s stock has pulled back as investors assess the scale of AI-related spending [13][16].

Microsoft just did the thing Big Tech keeps promising it can do: spend like the future has a delivery deadline and still put up clean numbers. The company keeps proving that demand for cloud and AI services is real, broad, and growing at scale. But investors are worried about how expensive it is to keep that engine running — and how quickly the payoff will show up where it counts. In its latest quarter, Microsoft posted $81.3 billion in revenue (up 17%) and $4.14 in non-GAAP EPS (up 24%); analysts were l ...

Core Viewpoint - Microsoft's quarterly revenue slightly exceeded expectations, but the significant growth in its cloud computing business disappointed investors seeking higher returns, leading to a more than 7% drop in its stock price in after-hours trading [1] Group 1: Financial Performance - Microsoft's Azure cloud division reported a revenue growth of 39% in the second fiscal quarter, surpassing the market expectation of 38.8% [1] Group 2: Competitive Landscape - Microsoft has maintained a first-mover advantage in the AI race among major tech companies due to its early investment in OpenAI, which supports many of its products, including M365 Copilot [1] - The recent launch of Google's Gemini model and the release of autonomous agents like Anthropic's Claude Cowork pose risks to Microsoft's AI business and its long-standing software products [1] Group 3: Investor Sentiment - Ongoing investor skepticism regarding whether large tech companies can deliver sufficient returns to justify their investments in AI has put pressure on Microsoft's stock price [1]

John Belton, Gabelli Funds portfolio manager and managing director for growth portfolios, reacts to Microsoft's second-quarter earnings on "Bloomberg The Close." ...

Group 1: AI Market Overview - The artificial intelligence (AI) boom continues strong, with 90% of surveyed investors planning to maintain or increase their AI stock investments this year, indicating no signs of fatigue in the market [1] - Experts believe AI will generate trillions of dollars in economic value over the coming decades, prompting major companies to invest hundreds of billions into AI infrastructure [2] Group 2: Key AI Stocks - **Nvidia**: Dominates the GPU chip market for AI data centers with an estimated 92% market share. The company has a $500 billion backlog and has recently entered full production on its new AI chip, Rubin, indicating significant growth potential [4][5] - **Microsoft**: Holds a 27% stake in OpenAI and benefits from double-digit revenue growth across its businesses. The company is well-positioned to leverage AI technology through its software and Azure cloud services, trading at a forward P/E ratio just under 30 [6][7] - **Salesforce**: Despite a nearly 40% decline from its late-2024 high, Salesforce remains a critical software ecosystem for many businesses, operating in sales and marketing [8]

How do you feel, having had a few minutes to take a look at some of these numbers. Yeah, it's still our topic. Investors may have expected 39 to 40% growth or larger.They got 38%. That's probably the only place where I see people picking on it. But realistically speaking, let's not forget Microsoft doesn't put Outlook in its press release.So we're gonna have to wait to see what the outlook is for Azure. And then most importantly, let's not forget a Google cloud that reports next week is not going to grow 38 ...

Core Insights - Microsoft reported a slowdown in cloud business growth, leading to an over 8% drop in stock price during after-hours trading, which later narrowed [2][10] - The adjusted earnings per share were $4.14, exceeding the expected $3.97, while total revenue reached $81.27 billion, above the anticipated $80.27 billion [10] - For the second quarter of fiscal year 2026, Microsoft announced a year-over-year revenue growth of 17% [10] Financial Performance - The net profit for the quarter was $38.46 billion, translating to an earnings per share of $5.16, up from $24.11 billion (or $3.23 per share) in the same quarter last year [10] - Azure and other cloud services revenue grew by 39%, slightly down from 40% in the previous quarter, with market expectations for this segment being 39.4% and 38.9% [10] - Other income for the quarter was $9.97 billion, a significant increase from an expense of $2.29 billion in the same quarter last year [10] Business Obligations - As of year-end, Microsoft's commercial remaining performance obligations reached $625 billion, a year-over-year increase of approximately 110%, largely due to a $250 billion cloud services agreement with OpenAI [11] - 45% of the commercial remaining performance obligations are related to OpenAI [11] Business Activity - The growth rate of commercial order volume surged from 112% in the first quarter to 230% [12] Segment Performance - Intelligent Cloud segment, which includes Azure, reported revenue of $32.91 billion, a nearly 29% year-over-year increase, surpassing analyst expectations of $32.40 billion [7] - Productivity and Business Processes segment, which includes Office software, Dynamics, and LinkedIn, generated revenue of $34.12 billion, a year-over-year growth of about 16%, exceeding the expected $33.48 billion [7] - More Personal Computing segment, covering Windows, Xbox, Surface, and Bing, reported revenue of $14.25 billion, a decline of about 3%, falling short of the expected $14.38 billion [7] Capital Expenditure and Strategic Moves - Microsoft is continuing to build data centers equipped with specialized chips to support generative AI models, and has also leased computing resources from CoreWeave and Nebius [8][14] - Capital expenditures and financing leases totaled $37.5 billion, a 66% year-over-year increase, exceeding analyst expectations of $34.31 billion [8][14] - Microsoft announced a price increase for commercial Office software subscriptions and secured a $30 billion cloud services deal with AI company Anthropic, which includes an additional agreement for up to 1 billion watts of computing power [8][14]

80.2% 80.3%. So a beat on both the top and bottom lines. These very important numbers in terms of their cloud revenue, 32.91% billion estimates, we're calling for 32.39%.So another beat there. Azure and other cloud revenue FX. That's up 38% right in line with the estimates here.So they are posting beats across the board. They also crossed the $50 billion mark for cloud revenue this quarter for the first time. These numbers coming across.And as we're looking at the move the move is to the downside. We're dow ...