Google and Microsoft unscrew on the stock market

One beat analysts’ expectations, the other underperformed. And yet, the result is the same: Microsoft and Alphabet, the parent company of Google, are both heavily sanctioned on the stock market. After Snap’s warning shot a few days ago, the publication of the two American tech giants confirms investors’ concerns. Growth is slowing and profits are sluggish.

Between July and September, Microsoft recorded an increase in turnover of 11% “only”, to 50.1 billion dollars (as many euros), and a net profit down 14%, to 17.6 billion dollars. A performance far from the group’s usual standards but superior to the consensus forecasts established by Factset for these two indicators. Only the branch “Intelligent Cloud”Microsoft’s leading source of revenue with $20.3 billion generated in the quarter, disappointed expectations with growth of 20%, including 35% for the star product Azure.

Waiting for Amazon, Apple and Facebook

For Google, the picture is darker. Directly exposed to the advertising market, the search engine saw its sales grow by a small 6%, to 69 billion dollars, less than expected by the consensus. Operating profit plunged 25% to $17.1 billion, again below analysts’ forecasts. YouTube, the video streaming subsidiary, even posted sales down nearly 2% in the quarter, to $7.07 billion. Despite strong growth of 38% to 6.87 billion, cloud activity remains a major source of losses. The division posted a negative operating result of 699 million dollars against 644 million a year earlier. The deficit generated by Google’s “other bets” also widened by 323 million to 1.61 billion dollars.

Down sharply by 6%, Google and Microsoft shares led other technology stocks in their wake late Wednesday afternoon. Meta (Facebook) and Amazon dropped nearly 2% when Apple fell 0.4%, pushing the Nasdaq index into the red while all other Western stock markets rose. Suffice to say that investors will have their eyes glued to the results of these three giants, which will be revealed between Wednesday and Thursday evening.

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