Tech giants Microsoft (MSFT: NSD) and Alphabet (GOOG: NSD) are set to release their quarterly earnings after the market closes on January 30. As investors await these reports, let’s take a closer look at what the market and analysts expect from these industry-leading companies.
Microsoft’s Q2 Expectations:
Microsoft is expected to post revenue of $61.14 billion for the second quarter, up from $52.75 billion in the prior-year quarter. The company’s increasing contributions from Artificial Intelligence (AI) and ongoing strength in Office 365 are expected to support its top-line growth. Analysts also forecast year-over-year earnings growth, with a consensus estimate of $2.77 per share, up from adjusted EPS of $2.32 in the prior-year quarter.
Analyst Opinion on Microsoft:
Analysts remain bullish on Microsoft’s prospects leading up to the Q2 earnings report. The stock has gained nearly 68% in one year, with 31 unanimous Buy recommendations, translating into a Strong Buy consensus rating. Furthermore, analysts’ average price target of $442.70 implies a 9.6% upside potential from current levels.
Alphabet’s Q4 Expectations:
Analysts expect Alphabet to post revenue of $85.27 billion for the fourth quarter, up from $75.33 billion in the prior-year quarter. The company is anticipated to benefit from strong year-on-year revenue growth in search and YouTube advertising, as well as potential opportunities arising from AI solutions. Wall Street analysts also forecast earnings of $1.59 per share, up from adjusted EPS of $1.05 in the prior-year quarter.
Analyst Opinion on Alphabet:
Alphabet stock holds a Strong Buy consensus rating with 15 Buy recommendations and five Holds. Analysts’ average price target of $1,598.30 suggests a 50.2% upside potential from current levels. Despite the stock’s significant appreciation of about 57% in one year, analysts remain optimistic about its prospects.
Conclusion:
Considering the strong growth potential driven by AI tailwinds, a robust cloud business, and cost-cutting measures, both Microsoft and Alphabet are positioned to deliver positive results in their upcoming earnings reports. However, it’s worth noting that the stocks have already seen substantial gains in the past year.
