The earning call from MSFT was a rude awakening for bulls, the market is reacting accordingly AH.
The fake rally had to end & needed a catalyst, MSFT is the most diverse tech company, if they struggle, the rest will be in deep shit. They said ads, consumer and enterprise spending are down the shitter.
Just some brain farts, not advice or anything close to it!
Edit: Some of you are truly regarded, no they didn’t beat any expectations, they missed & gave poor guidance for the entire industry. That’s why they went from 4.5% up after hours to 1.5% down & took QQQ with them.
EPS (USD)
Expected 2.31
Reported 2.20
Surprise -4.67%
Revenue (USD)
Expected 53.16B
Reported 52.75B
Surprise -0.77%
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This is the market crash we all have been waiting for. MSFT is down 1%
Looks like it is down 1%. Whoa!
https://preview.redd.it/47dzto5b05ea1.jpeg?width=1284&format=pjpg&auto=webp&v=enabled&s=6ebbe63dd8686b4151a04935396e868f273b8955
It’s literally a fucking dick, the algos are trollllling
The problem wasn’t this quarter’s earnings, it was the guidance for next quarter and beyond. Look at the price action after-hours. The initial reaction was very positive, but the guidance sobered everybody up.
Guidance is a funny thing. Companies tend to set guidance low, so that the next quarter can beat the target.
But the real thing here IMO is optics. Microsoft is laying off 10,000 employees. Like other tech companies, they overhired coming out of COVID and they need to drop their payroll. This is something they are committed to and want to follow through. They are spending way too much money on salaries.
Problem is, if you report a record quarter (which they basically did this quarter) and follow it up with rosy guidance, it looks really bad. Firing 10,000 people after a record quarter, things on paper have never been better. There has to be negative news here for them to justify the layoffs.
So my feeling is that they are being deliberately conservative here on guidance to justify the layoffs. Otherwise it looks like they are just firing people for no reason. They can’t fudge the past numbers. They are what they are. So instead they adjust guidance lower. Stock temporarily drops. Then 3 months from now they act surprised when revenues come in hot.
Don’t be surprised to see this from other tech companies going through layoffs. You think Google is going to go into earnings pumping their fists and saying things are great? They just laid off 10,000+ of their own. These are the current employees’ colleagues, friends, people they’ve worked with for years.
You can’t lay off all those people and then blow out earnings and guide up. It’s senseless. You have to be in a state of mourning for the near future, even if you know deep down that shit is actually fantastic and the 10K people you just laid off are simply dead weight. It’s all optics.
The stock price won’t care what the guidance was this quarter by the end of the year. The guidance today will be completely meaningless. The only numbers people will use to value the stock are the reported financials and the future guidance. You can happily guide down all you want, blame it on the tumultuous macro environment, be completely wrong, and nobody will care. In fact, they will celebrate.
i think both calls and puts of msft fucked up tomorrow
TSLA to take down all the dominos tomorrow… Thank you come again
Hopium getting spread like candy, but J-fuck-your-calls-Powell is coming from the high rope. You just can’t see him yet.
I sold calls. Talk about an emotional rollercoaster
Great, now y’all gonna buy 1000000000000x puts and we’ll keep going up
FUCK!!!!! -1% Jfc I’m done
My puts make me biased and therefore will sleep soundly and believe this post to be 100% accurate. Great content OP!
All I know is if the majority here thinks it’s going to tank then it’s time to load up calls.
yup so easy to predict where it’s going so am expecting that you went all in short on msft i mean it’s easy money right
Now they going to take your money and run it to $400 after
Oh no my calls are shaking
Actual earnings is slightly higher than estimated. What do you mean
Watch markets still be up 1.5% across the board tomorrow.
Because just like in 2020 when there was every sensible reason for markets to go down, only the Fed matters and they are now expected to lower and then halt rate increases (starting Feb 1 25bps).
The only thing that can cause a downturn at this point is the Fed. If JPow does the expected 25bps and speaks dovishly – just like P/E or any other metric, temporary earnings will not matter and valuations will go up.
I mean I don’t cover tech in my team but $msft is the least worrisome company in that sector no??
last sentence sums it up
WTF …i saw the news, looked at my AH gains..saw your post, looked again, now im crying
Yeah people holding calls went from thinking they were gonna wake up rich to getting destroyed.
Still waiting for that housing crash?
So, but calls at open for the 1030 reversal?
Bet we see market crash soon covid crash was just a warm up.
For a recession those are some damn good earnings. Moon tomorrow
well this didn’t age well
Sorry about your puts.
Microsoft Posts Earnings Beat On Solid Cloud Results, But Guidance Disappoints:
https://www.barrons.com/articles/microsoft-earning-stock-price-51674510719
Lol k bud
Lmao. It’s down 1.2%. That’s a ‘rude awakening’. I’m not just saying ‘lmao’. I’m actually laughing aloud. At you.
Paper hands, Papa musk will save bulls tomorrow, for now stay calm and on Thursday and Friday we will rally into FOMC mark may words. !banbet $SPY to $408 by 02/03
It’s not down much. Million other earnings coming up
The headlines are so contradictory.
As follows:
Microsoft stock dives into the red after forecast missed.
Analyst says Microsoft earnings bode well for other software companies.
I hope they are horrible and triggers a new low. I’m sitting on a ton of cash earning 4% waiting for the next down leg. Burn baby.
Green by EOD tmrw
Earnings beat. Expected $2.29 actual adjusted $2.32.
Guidance could obviously be better but at current values a PE of 26 isn’t unreasonable for a heavy hitter like Microsoft.
Current share price $239.58. Fair value last checked at $277.55. So current 13% lower than fair.
Even if you were to downgrade the stock by 13% based purely on guidance despite beating earnings it would already be at fair value with no deserved downside.
Of course that doesn’t mean there won’t be a drop but if there is it’s just putting the stock even more undervalued and making it an even better buy.
I mean it makes sense hearing of all these massive layoffs only makes sense that companies like msft and google are losing those big saas subscriptions.
This is brandons economy. First he gave America out of control inflation, then he exported the out of control inflation to europe with his war mongering. Dems still just say orange man bad so we are really not gonna get out of this anytime soon with half a brain celled dems still supporting massive inflationary policies. Everything about Brandons tenure has been awfull unless you are a member of a mexican drug cartel. Those guys are living fat right now.
Go woke. Go broke. Ask Disney. They lost $1 billion in market value. Needed to fire their CEO and then go back to the 1990’s to get a retread leader to apply disciplined leadership and to shut down fantasy constructs of running a woke corporation.
It’s hard work making money. Profits have to be attracted with skill and finesse…and not by fantasized Marxist ideology.
Gotta sell some of my options tomorrow and then see what happens after Tesla earnings.