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Microsoft and Alphabet: Charts to Watch Ahead of Earnings
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This is a key week for earnings as almost a third of the S&P 500 is expected to report earnings, including many of the tech titans and those now called the “magnificent 7.”
Two of the key reports will be, as always, Microsoft and Alphabet. Not only are they among the largest companies in the world, and key players in the Internet and Cloud, but now there is AI to add into the mix. While it’s still early in the AI lifecycle, both stocks have caught a bid this year on hopes about AI driving earnings.
What else do you need to know about Microsoft and Alphabet before they report earnings?
Microsoft has beat on earnings 3 quarters in a row. But even more impressively, it only has one earnings miss in the last 5 years, which includes, of course, the pandemic. That rare miss was in 2022.
Shares of Microsoft have rebounded in 2023 from the 2022 tech sell-off, adding 44%. They are now trading at new all-time highs. Earnings are expected to rise 4.8% in fiscal 2023 but jump 11.7% in fiscal 2024. And there is the impact of AI as well. Will it be an earnings catalyst?
Microsoft trades with a forward P/E of 32 and a PEG of 2.7. It’s not cheap.
Should investors still be wading into Microsoft even after this rally?
Alphabet is coming off an earnings beat last quarter, but that was only after it missed 4 quarters in a row. Alphabet has always had a mixed earnings surprise track record, although it did put together a nice beat streak of 7 quarters in a row during the pandemic.
Shares of Alphabet have jumped 38% this year after selling off in 2022. Earnings are expected to jump 18.2% in 2023 and another 17% in 2024.
Alphabet trades with a forward P/E of just 22, which is among the lowest of the Magnificent 7. It also has a low PEG ratio of just 1.5.
Is Alphabet undervalued even after 2023’s rally?
[In full disclosure, Tracey owns shares of MSFT and GOOGL in her personal portfolio.]
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Microsoft and Alphabet: Charts to Watch Ahead of Earnings
This is a key week for earnings as almost a third of the S&P 500 is expected to report earnings, including many of the tech titans and those now called the “magnificent 7.”
Two of the key reports will be, as always, Microsoft and Alphabet. Not only are they among the largest companies in the world, and key players in the Internet and Cloud, but now there is AI to add into the mix. While it’s still early in the AI lifecycle, both stocks have caught a bid this year on hopes about AI driving earnings.
What else do you need to know about Microsoft and Alphabet before they report earnings?
4 Must-See Earnings Charts
1. Microsoft (MSFT - Free Report)
Microsoft has beat on earnings 3 quarters in a row. But even more impressively, it only has one earnings miss in the last 5 years, which includes, of course, the pandemic. That rare miss was in 2022.
Shares of Microsoft have rebounded in 2023 from the 2022 tech sell-off, adding 44%. They are now trading at new all-time highs. Earnings are expected to rise 4.8% in fiscal 2023 but jump 11.7% in fiscal 2024. And there is the impact of AI as well. Will it be an earnings catalyst?
Microsoft trades with a forward P/E of 32 and a PEG of 2.7. It’s not cheap.
Should investors still be wading into Microsoft even after this rally?
2. Alphabet (GOOGL - Free Report)
Alphabet is coming off an earnings beat last quarter, but that was only after it missed 4 quarters in a row. Alphabet has always had a mixed earnings surprise track record, although it did put together a nice beat streak of 7 quarters in a row during the pandemic.
Shares of Alphabet have jumped 38% this year after selling off in 2022. Earnings are expected to jump 18.2% in 2023 and another 17% in 2024.
Alphabet trades with a forward P/E of just 22, which is among the lowest of the Magnificent 7. It also has a low PEG ratio of just 1.5.
Is Alphabet undervalued even after 2023’s rally?
[In full disclosure, Tracey owns shares of MSFT and GOOGL in her personal portfolio.]