Below is Validea's guru fundamental report for MICROSOFT CORP (MSFT). Of the 22 guru strategies we follow, MSFT rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental moment
Would you be willing to let a crowd of complete strangers pick a stock for your portfolio? There was a time when most people's answer would have been a resounding "no." Times and circumstances have changed, however. It's now clear that most investors actually do apply sound judgm
Cloud computing is a massive industry, and it will only get bigger. Grand View Research pinpoints the total cloud computing market opportunity at $620 billion right now, but it's expected to grow to $1.5 trillion by 2030. With such a large opportunity available, plus massive grow
It was a rough month for investors in the market, but some stocks had more meaningful moves than others. These four stocks illustrate important trends that are likely to influence stock market performance over the next few months. Consider these dynamics before making changes to
Just two months remain in 2023 -- a year that will likely go down in history as a pivotal period in the rise of artificial intelligence (AI). As impressive as recent leaps forward for the technology have been, this incredible shift is just getting started.
Shares of Apple (
NASDAQ:AAPL
) and Alphabet (
NASDAQ:GOOGL
) were rocked following their respective quarterly earnings reports. And though the results weren't as impressive as the likes of other "Magnificent Seven" members, I view the weak post-earnings action as more of a chance for contrarians to buy rather than a red flag that should spark a rush to the exits.
Undoubtedly, if you're looking for a reason to sell after recent earnings, the quarters of Apple and Alphabet gave you some reasons. However, if you were looking for positives, each quarter had that, too. Both companies delivered some pretty decent earnings.
That said, the market has set a high bar this time of year, with macro and rate risks atop everyone's radar. Though Apple and Alphabet didn't deliver spectacular results, I don't think they were bad enough to spark a dip.
Therefore, let's
stack up the two tech titans using TipRanks' Comparison Tool.
Apple: A Good Quarter Showcased to a Tough Crowd
After clocking in its fourth straight quarter of sagging sales while setting a low bar for the December quarter — CFO Luca Maestri is looking for revenue to be similar to last year — shares of Apple dipped over 3% in the after-hours session of trade, only to recover most of the lost ground the very next day.
Ultimately, though, Apple ended down just 0.5% following a quarter that I thought had quite a few positives (like record Services revenue). A flat-ish move post-earnings may not seem terrible until you consider the fact that it didn't participate in what was a strong rally for broader markets on Friday that saw the S&P 500 rise almost a full percentage point.
Indeed, four straight quarters of sales in the red may be a horrific headline for some Apple skeptics. However, such stagnation is likely in the rear-view mirror as the consumer looks to heal and Apple looks to put the finishing touches on its Apple Vision Pro headset before it formally launches in a few months.
Neuburger Berman analyst Daniel Flax is just one of the bulls that sees Apple's growth re-accelerating from here. If the upcoming Vision Pro mixed-reality headset is a hit and the iPhone 15 makes up for lost time in the new year, I think the stage could be set for an AAPL stock breakout.
And while Greater China numbers were also flat, thanks in part to competitive pressures from domestic smartphone maker Huawei, I think China concerns are overblown.
Competition is nothing new for Apple. And to think Apple will fail to stay up to speed against Huawei would be to heavily discount the Apple brand. There's still a great deal of brand affinity for Apple and other American brands in China. As such, I view flat Chinese sales as a mere hiccup than the start of a troubling trend. China is still Apple's third-largest market, and it's one in which Apple has room to run.
Apart from the strong brand, I believe Apple's hardware prowess will help it catch up to the likes of Huawei in China over the coming years. Apple Silicon is already building chips on the 3nm process with an intense focus on per-watt performance. My bet is that Apple will widen the per-watt performance gap from here.
Given the stock is trading at where it was two years ago, I don't view Apple as ripe for a continuation of its correction; It already had one.
What is the Price Target for AAPL Stock?
Apple's a Moderate Buy, according to analysts, with 22 Buys and nine Holds assigned in the past three months. The
average AAPL stock price target of $201.47 implies 14.1% upside potential.
Alphabet: Weak Cloud Growth Clouding the AI Story
Alphabet stock was slapped with a brutal two-day plunge of around 12%, even as the firm clocked in better-than-expected earnings results. For the quarter,
Alphabet reported third-quarter
earnings per share of $1.55, comfortably ahead of the $1.46 estimate. Weakness in its Cloud division cast a dark shadow over the quarter, though, with cloud sales rising just 22%, down from 28% in the last two quarters.
Indeed, Microsoft's (
NASDAQ:MSFT
) Azure may very well take share away from Google Cloud as it continues sprinkling in generative AI across its broad suite of products. AI plus Azure may be the perfect combo to take Microsoft's cloud business to the next level. That said, don't forget that Alphabet is an AI-savvy titan itself. Though Alphabet may be slower to effectively monetize AI versus Microsoft, I think Alphabet will make up ground once it's ready to flex its own AI muscles.
For now, Google is hard at work pushing out new AI products, like Bard and Duet AI, which seems to mirror what Microsoft is doing with Bing and Copilot. The AI wars are not over yet -- not by a long shot.
GOOGL trades at just 24.8 times trailing price-to-earnings (P/E), making it the cheapest of the Magnificent Seven stocks. I view Alphabet stock as a relative bargain while the distraction of the
antitrust trial plays out in the background. Who says you need to pay a fat premium for top-of-the-line AI exposure?
What is the Price Target for GOOGL Stock?
Alphabet is a Strong Buy, according to analysts, with 26 Buys and seven Holds assigned in the past three months. The
average GOOGL stock price target of $152.67 implies 18.3% upside potential.
Conclusion
The so-called Santa Claus rally may be arriving earlier this year, but the real gift, I believe, is the recent weakness in Apple and Alphabet. I'm bullish on both companies, as most other investors overweigh the near-term negatives over the long-term positives.
Disclosure
Federal Trade Commission Chair Lina Khan found some cozy company over the course of a two-day trip through Silicon Valley this week as she looked to reverse her reputation for being a scourge of Big Tech.
With Q3 results from more than 80% of S&P 500 members already out, we can confidently say that actual results have once again turned out to be better than expected. Keep in mind that Q3 earnings estimates had barely budged ahe
Wall Street's main stock indexes rallied on Friday as bond yields fell sharply after data showed signs of slowing U.S. jobs growth and an uptick in unemployment, boosting hopes that the Federal Reserve is done with its interest rate hiking campaign.
ChatGPT maker OpenAI is expected to announce product enhancements that will make its AI models cheaper, with more functionality, in its first-ever developer conference on Monday.
Wall Street's main stock indexes gained on Friday as bond yields fell sharply as data showed signs of slowing U.S. jobs growth and an uptick in unemployment, boosting hopes that the Federal Reserve is done with its interest rate hiking campaign.
Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.
Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.
British Prime Minister Rishi Sunak championed a series of landmark agreements after hosting the first artificial intelligence (AI) safety summit but a global plan for overseeing the technology remains a long way off.
Below is Validea's guru fundamental report for MICROSOFT CORP (MSFT). Of the 22 guru strategies we follow, MSFT rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental moment
The past few years have been fraught with uncertainty for Microsoft (NASDAQ: MSFT) investors. However, following last year's beatdown, it appears the tech titan has found its way back into investors' good graces. After losing as much as 34% of its value last year, Microsoft stock
Artificial intelligence (AI) stocks have been in red-hot form on the market in 2023, which is not surprising -- the technology has the ability to transform multiple industries and significantly boost the global economy.
Microsoft (NASDAQ: MSFT) just gave investors a detailed update on its operating and financial trends, and the news was mostly positive. Sales growth accelerated when compared to the prior quarter, and earnings are improving by more than 20%.