To quote Papa John, “Stay tuned… The day of reckoning will come… the record will be straight… Stay tuned.“
Those famous words were uttered just weeks before COVID-19, fetching them a place in meme glory (not only that, but a significant non-significant number of memelords now credit Papa John with causing COVID). Today, those words have never been wiser. 🧠
America’s largest non-financial companies are starting to file their paperwork. They’re turning in their reports. And to quote the now-infamous pizza tycoon… the day of reckoning has come. Some of the Nasdaq (and S&P 500/Dow’s) largest-held assets are reporting today.
We’ll call it a Nas-Stack of earnings… poetically, it kicks off with Microsoft and Google. 🤖
Their reports probably wouldn’t have been interesting in precedented times, but this is 2022. We don’t know what “precedented” means anymore.
Microsoft beat on the top and bottom line, notching an adjusted EPS of $2.22 per share (vs. $2.19 expected by Refinitiv analysts) and revenue of $49.36 billion (vs. $49.05 billion per those same analysts.) Revenue was up 18% YoY. The company’s security and cloud divisions helped float them to a small beat.
The stock was down -5.6% on the day. You can read Microsoft’s whole report here.
Google, on the other hand, wasn’t quite the beat. The company missed both on top and bottom lines. EPS was $24.62 (vs. $25.69 expected) and revenue came in at $68.01 billion (vs. $68.11 billion expected.) What went wrong? YouTube ad revenue, really. That’s about it. Revenue was up 23% YoY.
The company made its best attempt to wash over its losses. Google announced a $70 billion buyback. But, as we already said, it’s 2022 and nobody cares. Companies can trade at relatively healthy multiples and get hosed. $GOOG was down -9.6%.You can read the company’s whole report here.
What’s to be said about these reports? Well, the market is officially in freak-out mode. 🚨 🚨 We’ll reflect on that at length below, because the Big Tech companies weren’t the only game in town today… it was a real sea of red.
However, for Big Tech companies reporting tomorrow, it’s wait and see. Today is too early to dismiss a comeback, but most investors aren’t waiting to read “recession” in more headlines.