Nasdaq 100 Edges Higher as Microsoft, Alphabet, Twitter Report Earnings

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Nasdaq 100, Microsoft, Google, Twitter – Talking Points

  • Twitter reports big miss on top and bottom line, shares trade higher after the bell
  • Alphabet posts blowout quarter on strong revenue growth, shares slightly lower
  • Microsoft beats estimates, highlights impact of chip shortage on Windows sales

US equities broadly advanced on Tuesday as sentiment remains rosy with the corporate earnings season in full swing. Earnings continue to be strong despite lingering fears regarding supply chain issues and inflation. Despite finishing Tuesday’s session in the green, all major US indices closed well off of session highs. The afternoon retreat saw the Nasdaq 100 Index come to rest on trendline support, a level that has mostly held throughout October.

Nasdaq 100 Index 1 Hour Chart

Chart created with TradingView

Tueday’s market close saw a slew of major tech companies report quearterly earnings, with Alphabet (Google), Microsoft, and Twitter highlighting the pack. Results were mixed, with Alphabet and Microsoft beating top and bottom line estimates, while Twitter missed revenue and earnings estimates.

Twitter Earnings Summary

Twitter’s quarterly results were massively impacted by a “one-time litigation charge” of over $760 million, which relates to a settlement the company reached over misleading investors about growth metrics. Twitter also noted that the impact of Apple’s recent iOS privacy change was smaller than expected, as Snapchat and Facebook both cited the changes as the main disruptions during the most recent quarter.

Revenue: $45.32 billion, vs. $43.97 billion est.

Earnings per Share: $2.27 vs. $2.07 est.

Microsoft Earnings Summary

Microsoft shares gained in the afterhours session as the company exceeded analyst estimates for the first quarter. Company revenue grew 22% year over year, the highest rate of growth since 2018. Despite robust growth from Azure and other cloud services, management highlighted that global chip shortages had a material impact on sales of Windows software to device manufacturers.

Revenue: $45.32 billion, vs. $43.97 billion est.

Earnings per Share: $2.27 vs. $2.07 est.

Alphabet Earnings Summary

Google also reported a blowout quarter after the bell, as advertising revenue rose 43% from the same period last year. YouTube ad revenue rose to $7.21 billion from $5.04 billion last year. Despite the strong report, shares dipped slightly in the afterhours session. Unlike other tech peers, Google’s ownership of the Android OS appears to have insulated the company from the fallout relating to Apple’s recent iOS privacy changes.

Revenue: $45.32 billion, vs. $43.97 billion est.

Earnings per Share: $2.27 vs. $2.07 est.

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— Written by Brendan Fagan, Intern

To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter

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