Weekly Market Digest: Microsoft Beat Estimates
Microsoft beat estimates
Microsoft reported better-than-expected quarterly revenue on Tuesday. It reported a revenue of just over $56 billion for the last quarter, representing a 13% increase compared to the same period last year. This growth was primarily driven by the strong performance of Microsoft’s Azure cloud computing division and office software businesses.
Big Tech companies are under constant pressure to meet high targets set by investors. Microsoft is banking on artificial intelligence (AI) to enhance its business in the long term. This explains the company’s investments in OpenAI, the creator of ChatGPT, and its efforts in developing its own chatbot. The positive results from the integration of AI in their quarterly performance should alleviate investors’ concerns about the potential slowdown of Microsoft’s cloud business, which is its biggest revenue generator. This success further strengthens trust in Microsoft’s overall strategy.
Meta reported mixed results
Meta Platforms Inc. reported a combination of positive and negative results in its recent financial report. The company exceeded expectations in terms of revenue growth, indicating its ability to enhance its core advertising business while making significant investments in artificial intelligence and virtual reality.
However, Meta also expressed concerns about the outlook for the upcoming year. This report follows a decline in the Nasdaq 100, which experienced its largest drop in 2023. The disappointing cloud performance of Alphabet Inc., the parent company of Google, overshadowed the strong sales of Microsoft Corp.
Gold is bullish amid Mideast tensions
According to Israel’s military, they have eliminated the deputy head of intelligence for Hamas, who was allegedly involved in planning the attacks on October 7 that resulted in the deaths of 1,400 individuals. During the night, the army conducted a limited ground operation in northern Gaza with infantry and tanks. Although a few humanitarian aid trucks reached Gaza on Thursday, there has been no indication of fuel being supplied. The United Nations, concerned about fuel shortages potentially disrupting relief efforts, is working on rationing existing reserves for its facilities, including bakeries and health centers.
Gold has been performing exceptionally well this month due to increased demand from investors seeking a safe haven amid stock and bond market weaknesses, as well as geopolitical instability in the Middle East. The ongoing rise in US bond yields is causing traders and investors to grow increasingly worried about US fiscal policy and the potential consequences of the recent surge in both real and nominal yields. As a result, the current situation is one where rising bond yields are supporting the value of gold.
