Shares of Microsoft Corporation (NASDAQ:MSFT) are little changed on Friday. That wasn't the case yesterday. They dropped by 10% after the company reported its earnings.Microsoft is our Stock of the Day. It may have found a bottom, and it could even reverse and move higher.As you can see on the chart, the shares found a bottom around $420. This wasn't a coincidence.Last May the stock gapped up to $420. This was about a 7.5% move. When this happened, many investors and traders sold shares. They thought it was ...

Core Insights - The earnings reports from Microsoft and Meta have elicited mixed market reactions, highlighting contrasting investor sentiments towards their AI investments [2][4][13] Microsoft - Microsoft continues to invest aggressively in AI, but faces concerns regarding its dependency on OpenAI and the potential return on investment (ROI) from these expenditures [3][6] - Azure's growth is projected to remain stable, with a growth rate above 35% considered impressive, yet the market reacted negatively to Microsoft's latest report [3][4] - The company is also grappling with broader disruptions in the software market due to AI, which may affect its revenue model and sales processes [5][6] Meta - Meta's aggressive investment in AI has yielded positive results, particularly in ad revenue growth, which has been significantly enhanced by AI-generated content [4][9] - The company reported a capital expenditure (capex) of up to $135 billion, which investors reacted positively to, contrasting with previous reports [7][12] - Despite the positive revenue growth, concerns remain about Meta's lack of business diversification compared to competitors like Google, as it primarily relies on ad revenue [10][11] Financial Performance - Meta's projected free cash flow for the year is expected to be around $12-13 billion, a significant decrease from nearly $50 billion in the previous year [12] - The company is also increasing its debt levels, raising questions about the sustainability of its aggressive AI investment strategy [12][13]

Earnings Reports - Microsoft and Meta both beat expectations, with Meta increasing its CapEx spending to $17 billion, a 41% growth from last year [4] - Microsoft stock fell 10% post-earnings, while Meta's stock rose 10%, indicating differing market reactions despite similar news [5] - Meta's average revenue per user reached $16.56, up 16% year-over-year, marking 10 consecutive quarters of double-digit growth [9] - Microsoft continues to see solid growth in its cloud segment, but concerns arise about reaching a peak [10] - Tesla's earnings report showed declines in deliveries and production, with the stock initially rising but then fading [12] - Apple reported record sales with iPhone revenue exceeding $85 billion and services revenue surpassing $30 billion, but the stock declined due to perceived lack of investment in AI [16] Health Insurance Sector - UnitedHealth's stock dropped 20% after projecting a revenue decline in 2026, the first such decline in decades, influenced by proposed minimal increases in payment rates [18] - Other health insurance stocks also fell, with Humana down 21%, CVS down 14%, and Molina Healthcare down 8% [19] Travel and Leisure Industry - Royal Caribbean's stock rose 19% following stronger-than-expected guidance, indicating double-digit growth in revenue and earnings [21] - Southwest Airlines also saw a 19% increase in stock price, projecting a 300% rise in EPS for 2026 compared to 2025 [22] - The performance of these companies suggests underlying demand in the travel and leisure sector [23] Upcoming Earnings - Anticipation builds for Amazon and Alphabet's earnings reports, with a focus on Amazon's AWS performance and Alphabet's investment strategies in AI [24][27] - Other notable companies reporting include Uber, Qualcomm, and several pharmaceutical firms [28] Macro Economic Insights - The upcoming jobs data is expected to be significant, with previous reports showing only 50,000 jobs added, raising concerns about potential negative revisions [36] - Consumer confidence remains low, attributed to persistent inflation and rising prices affecting daily life [39][40] - The political landscape may further influence consumer perceptions of the economy, especially with midterm elections approaching [43]

January's in the books. Joining me is Kenny Pulcari, partner and chief market strategist of Slatestone Wealth with five names to add to your February playbook. Kenny, great to have you here.>> Well, thank you for having me back. I love coming home to the New York Stock Exchange. >> Well, it's great to have you. And you have five names that we need to add.They're a mix of growth and value. So, all Dow components >> across a range of sectors, right. Talk about diversification.So, it's all good. >> And uh all ...

Group 1 - The Conservative Income Portfolio focuses on value stocks with high margins of safety and uses well-priced options to reduce volatility [1] - The Enhanced Equity Income Solutions Portfolio aims to generate yields of 7-9% while minimizing volatility [1] - Microsoft Corporation (MSFT) is highlighted as a key stock attracting value investors in the current bull market, indicating its strong performance [2] Group 2 - Trapping Value is a team of analysts with over 40 years of combined experience, focusing on options income and capital preservation [2] - The Conservative Income Portfolio includes two income-generating portfolios and a bond ladder, emphasizing lower volatility and high income potential [2]

Earnings Overview - The Q4 2025 earnings season shows solid earnings and sales growth for the S&P 500, but the percentage of companies beating expectations is lower compared to previous periods [1] - Post-earnings reactions have varied, with Meta Platforms (META) experiencing a share price increase while Microsoft (MSFT) faced significant declines [2] Microsoft (MSFT) Performance - Microsoft reported a double-beat with adjusted EPS of $4.14, a 24% year-over-year increase, and sales of $81.3 billion, up 17% from the previous year [3] - Despite impressive headline growth, investor concerns arose due to high capital expenditures of $37.5 billion, primarily for cloud and AI investments, and a slowdown in Azure growth [4][6] - Azure's revenue growth decelerated to 31% year-over-year, down from previous growth rates of 35% and 39% [8] Meta Platforms (META) Performance - Meta also achieved a double-beat with adjusted EPS of $8.88, an 11% year-over-year increase, and a 24% rise in sales [9] - The company saw a 7% year-over-year increase in average Family Daily Active People, reaching approximately 3.6 billion, and ad impressions grew by 18% [10] - Meta's full-year 2026 expense guidance is between $162 billion and $169 billion, with significant allocations for infrastructure and talent compensation [12] Comparative Analysis - The contrasting post-earnings reactions highlight the market's differing perceptions of capital expenditures and growth rates between META and MSFT [13]

Earnings reality, software doubt, crypto stressMETA and MSFT Earnings Reset ExpectationsMeta (NASDAQ:META) and Microsoft (NASDAQ:MSFT) earnings forced a reset in how the market is thinking about AI-led growth. Meta's results reinforced operating leverage and disciplined monetization, while Microsoft's print highlighted how elevated expectations leave little room for execution noise. The reaction was less about whether AI is working and more about how much is already priced in.The broader message is valuatio ...

分组1 - Starbucks is focusing on operational excellence and customer service through its Green Apron service program, which aims to enhance the customer experience and improve transaction growth [2][34][37] - The company reported positive same-store sales in the US and strong growth in China, indicating a successful turnaround strategy [33][34] - Starbucks plans to introduce new drinks, food items, and an upgraded rewards program, along with remodeling stores to enhance customer experience [34][41][46] 分组2 - In the tech sector, companies that fail to deliver on AI promises during earnings reports, such as Microsoft and ServiceNow, are facing significant market penalties, with Microsoft losing $357 billion in market cap [5][6] - Conversely, companies like Apple that demonstrate strong performance and potential in AI, particularly with a $16 billion year-over-year increase in iPhone sales, are being rewarded by the market [7][10] - The S&P 500 software and services index has reached a nine-month low, highlighting a bifurcation in tech stocks where only those with strong AI strategies are thriving [6][22] 分组3 - The recent appointment of Kevin Walsh as the next Fed chairman could influence market dynamics, particularly regarding interest rates and asset allocation strategies [3][31] - The market is currently experiencing volatility in precious metals, with gold prices dropping significantly, indicating potential shifts in investor sentiment [24][25][28] - Analysts are observing a super cycle in memory stocks, driven by demand for AI-related technologies, which could present investment opportunities [18][19]

Core Insights - Concerns about returns in the AI sector are resurfacing, with Big Tech earnings indicating that companies must show results quickly after significant investments in AI or face market penalties [1] Group 1: Meta Platforms - Meta Platforms (META) experienced a stock increase of 10.4% on January 29, 2026, with a revenue growth of 24% in the December quarter, driven by AI-enhanced online advertising [2] - The company provided a first-quarter revenue forecast of $53.5 billion to $56.5 billion, surpassing analyst expectations of $51.41 billion [3] - Meta's capital expenditures related to AI are projected to be between $115 billion and $135 billion for 2026, exceeding analyst expectations of $110.7 billion and nearly doubling the 2025 figure of $72.2 billion [4] Group 2: Microsoft - Microsoft (MSFT) saw a stock decline of about 10% on January 29, 2026, despite reporting better-than-expected earnings and sales, as investors were concerned about slowing momentum and rising risks [6] - Azure cloud revenue grew by 39% in the fiscal second quarter, slightly above forecasts, but below the 40% growth seen in the previous quarter [6] - A significant concern for Microsoft is that OpenAI accounts for 45% of its remaining performance obligations, raising fears about future revenue stability [8] Group 3: Tesla - Tesla's stock fell by 3.2% on January 29, 2026, despite beating quarterly profit and revenue expectations, as investors reacted to the scale of future spending [9] - The company announced plans to more than double its capital expenditures to over $20 billion, focusing on AI, humanoid robots, and fully autonomous vehicles [9] Group 4: Competitive Landscape - The AI race is intensifying, with OpenAI issuing an internal "code red" following strong early reviews of Google's Gemini 3, while Anthropic's Claude Code has reached an annualized revenue run rate exceeding $1 billion [12] - AI ETFs such as AIQ, BOTZ, and ARKQ are considered long-term investment opportunities despite short-term volatility [11] Group 5: ETFs Performance - ETFs heavily invested in Meta, like Fidelity MSCI Communication Services Index ETF (FCOM) and Vanguard Communication Services ETF (VOX), gained approximately 2.8% each [13] - Conversely, ETFs focused on Microsoft, such as Roundhill MSFT WeeklyPay ETF (MSFW) and iShares U.S. Technology ETF (IYW), experienced declines of 12.2% and 1.4%, respectively [13]

Core Viewpoint - Microsoft (MSFT) experienced a significant drop of approximately 10% in its stock price following the announcement of its second-quarter earnings, despite exceeding expectations in earnings per share and revenue. The decline was attributed to slowing growth in Azure, a 66% increase in capital expenditures to $37.5 billion, and 45% of its $625 billion backlog being related to OpenAI [1][2]. Group 1 - Microsoft reported second-quarter earnings per share and revenue that surpassed expectations [1][2] - The stock price fell about 10% due to concerns over Azure's growth slowdown [1][2] - Capital expenditures surged by 66% to $37.5 billion [1][2] - 45% of the $625 billion commercial backlog is associated with OpenAI [1][2]