Alphabet Inching Ahead of Microsoft

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Most top technology giants have reported remarkable earnings, well over analyst predictions which makes deciding on one not particularly cut and dry especially considering the cost of just one share. The two front runners right now are Alphabet and Microsoft, with both experiencing surging share values.

Alphabet

As Google’s parent company, Alphabet, has announced positive third quarter results bringing its stock to the highest value yet at $730 before slipping back to $702 by the end of trading on earnings day. Despite the fallback, the stock still ended up gaining 7.7 percent on the day, partly fueled by the company’s decision to buy back $5.1 billion of its shares.

Alphabet also beat expectations on earnings and revenue, showcasing Q3 earnings per share of $7.35, significantly above consensus estimates of $7.21. The high point of the report was net income which shot up by an enviable 45 percent over last year. Revenues also surged by 13 percent year over year. In this sea of positives the issue still plaguing Google is ad revenue, and criticism concerning the transition from big computer screens to smaller hand-held ones, and how advertiser messages now appear on them.

Microsoft

Microsoft appears to be going in the right direction since Satya Nadella took over as CEO last year. Focusing on cloud business seems to have been a good choice, as the company is now reaping the benefits with first quarter revenue from its “Intelligent Cloud” division, which encompasses Windows Server and Azure, up by 8 percent at $5.9 billion.

The growth comes as traditional hardware and software products see significant drops for other companies such as IBM and Hewlett-Packard, making the shift to cloud a clear advantage for Microsoft. Another positive comes from the launch of Windows 10, which has already seen 10 million installations on PC’s globally.

Microsoft reported $0.67 adjusted earnings per share compared to estimated earnings of $0.59 and revenue came in at $21.66 billion beating market estimates of $21.04 billion. However, despite this, Microsoft still saw a 12 percent drop in revenue from last year which is something both it and investors will need to keep an eye on going forward.

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