Yahoo Finance Trending tickers: Microsoft | Alphabet | First Republic | Meta | GSK
A look at the stocks making headlines on Wednesday
Here’s a look at some of the stocks investors are watching on Wednesday, 26 April.
Microsoft (MSFT)
Shares in Microsoft were up again on Wednesday by 7% after the software giant's fiscal third-quarter earnings per share of $2.45 (£1.96) beat Wall Street estimates of $2.23 the previous day.
Revenue of $52.9bn came in above expectations of $51.02bn, despite a continued slowdown in the company's cloud revenue.
The tech giant said revenue from Azure and other cloud services grew 27% year-over-year for the quarter. That number has declined every quarter since at least Q3 2022, as a result of companies trimming their capital expenses due to rising interest rates.
Microsoft is seen by investors as one of the most obvious winners in the rapidly emerging AI market, with its stock up 17% this year.
Read more: Microsoft Q3 earnings: Despite cloud struggles, tech giant beat on revenue and EPS
Microsoft helped kick off Big Tech's AI obsession with its multi-year, multi-billion dollar investment in ChatGPT developer OpenAI.
Traders are betting that AI adoption will help Microsoft challenge the market dominance of Google.
“The world's most advanced AI models are coming together with the world's most universal user interface – natural language – to create a new era of computing,” Satya Nadella, Microsoft’s chief executive said in a statement.
“Across the Microsoft Cloud, we are the platform of choice to help customers get the most value out of their digital spend and innovate for this next generation of AI.”
Alphabet (GOOGL)
Alphabet stock rose again on Wednesday by around 1% – after climbing as much as 5% in after hours trading on Tuesday, following its first-quarter earnings release.
The tech giant’s Google Cloud unit turned a profit for the first time while revenue in this segment grew by 28%.
It also reported that its YouTube ad revenue was $6.69bn – a decline of 2.6% year-over-year. However, it slightly beat analyst expectations of $6.6bn. It comes as the video platform continues to navigate a soft ad market.
Alphabet said the board had approved $70bn in stock repurchases.
Read more: Alphabet first-quarter earnings top estimates, announces $70B stock buyback
The company also revealed a number of charges related to its efforts to rein in costs, including $2.6bn linked to the Alphabet's layoffs and office space cutbacks.
Investors were also across the companies’ outlook on artificial intelligence. Google's AI capabilities were recently questioned by some as the company's AI chatbot, Bard, failed to impress.
"We introduced important product updates anchored in deep computer science and AI. Our North Star is providing the most helpful answers for our users, and we see huge opportunities ahead, continuing our long track record of innovation," Sundar Pichai, the chief executive of Alphabet and Google, said in a statement.
Losses related to the company's AI efforts totalled $3.3bn during the first quarter.
First Republic (FRC)
Investors will be keeping across shares in First Republic after its stock fell a massive 49% on the back of dire first-quarter earnings from the embattled lender.
On Wednesday, its stock was still down heavily – by almost 30% soon after US markets opened.
Investors reacted after the US bank said customers had pulled more than $100bn (£80bn) from their accounts in the three months ending 31 March.
"With the closure of several banks in March, we experienced unprecedented deposit outflows," the San Francisco-based bank's CFO Neal Holland said.
It follows last month’s banking crisis in which First Republic was seen as one of the banks most at risk of failure, after other collapses in the sector.
Read more: FTSE listing - Pension funds blamed for pushing companies to shun London for New York
It was stabilised by a multi-billion dollar rescue deal with help from Bank of America, Citigroup, JPMorgan, and Wells Fargo.
However, First Republic noted that the situation had since stabilised and said it was pursuing "strategic options" to strengthen its position, including cutting costs by shedding 20% to 25% of its workforce in the coming months.
"We're taking steps to meaningfully reduce our expenses to align with our focus on reducing the size of the balance sheet," Chief executive Mike Roffler said in a post-earnings briefing.
Meta (META)
First-quarter earnings from Meta Platforms are due after the US market close.
After a challenging 2022, Meta’s shares became one of the top performers this year, up 75% year-to-date – and its stock rebounded more than 140% from its November low.
“The company was criticised for its excessive spending on the Reality Labs, or so-called Metaverse. Following a slew of cost-saving measures, such as widespread job cuts and payroll expense reductions, the company expects to return growth in revenue after a three straight quarterly decline,” Tina Teng, market analyst at CMC Markets, said.
Meta’s full-year revenue growth in 2022 declined by 1% to $116.61bn. Its cost in Reality Labs was $13.72bn.
The company, however, has insisted on devoting 20% of its overall costs and expense to Reality Labs in 2023.
“Meta Platforms recently announced the second round of job cuts of 10,000 after 11,000 workforce layoffs in November, with an aim to reduce expenses by $5 billion from its prior outlook to between $89 billion and $95 billion this year,” Teng added.
The CMC markets analyst further noted that the company’s revenue guidance is between $26bn and $28.5bn in the first quarter with analysts estimating $27.65bn, or a 1% decline from a year ago.
The earnings per share is expected to be $2.03, or a 25% drop annually.
GlaxoSmithKline (GSK.L)
Shares in GlaxoSmithKline (GSK) were trading down nearly 2% in morning London trade on the FTSE 100 after the company posted a trading update.
“GSK reported first quarter adjusted profit of 37 pence per share, beating analysts’ expectations for 33.2 pence while revenue hit £7 billion, also topping estimates for £6.5 billion,” Victoria Scholar, head of investment at Interactive Investor, said.
The pharma giant also confirmed its 2023 full-year guidance for sales and earnings on Wednesday and highlighted that its shingles vaccine drug Shingrix had generated sales of £833m, beating consensus forecasts.
“Many investors have been shifting towards defensive sectors like pharmaceuticals this year amid the sluggish economic backdrop, providing a tailwind for stocks like GSK which is up over 7% in the past six months,” Scholar added.
She also noted that it was still underperforming, however, reflecting investor concerns about the strength of GSK’s drug pipeline.
“GSK has been pursuing inorganic growth instead, most recently with its acquisition of Bellus Health for $2 billion which offers respiratory drugs,” she added.
Watch: Microsoft earnings: CEO Satya Nadella encouraged by Bing users' feedback on AI
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