In a world where technology is king, with artificial intelligence rapidly transforming how we live and work, three multinational conglomerates have risen to the top, each wielding incredible power and influence over the digital landscape. Microsoft, Alphabet, and Meta (formerly Facebook) are familiar names, as they have become integral parts of our daily lives. From searching the web to staying connected with friends and family, these companies have revolutionised how we interact with technology.
Microsoft Corporation (NASDAQ: MSFT)
Microsoft Corporation, the world-renowned multinational technology kingpin, has revolutionised how we live, work, and communicate from Microsoft Windows to Office to Xbox. With its ubiquitous products, it is no surprise that the company forecasts impressive growth amidst a world where artificial intelligence is the next big thing among market participants.
Fundamental Analysis:
Despite concerns of a mild recession come the end of the 2023 financial year, Microsoft posted fiscal third-quarter results that exceeded analyst estimates, reporting a quarterly earnings per share (EPS) figure of $2.45 against analyst expectations of $2.23. With an impressive beat on the company’s bottom-line results, shareholders would have been pleased to see the technology kingpin report a 3.6% beat on quarterly revenue expectations, with consensus pointing toward artificial intelligence driving further top and bottom-line growth in the years to come.
Chief Financial Officer, Amy Hood, has expressed her bullish outlook on artificial intelligence and believes that for the fourth quarter, Microsoft will deliver “$54.85 billion to $55.85 billion in revenue,” which will mark an impressive quarter-on-quarter growth in the company’s top-line. In a recent statement, Hood expressed her excitement around “the early feedback and demand signals from the AI capabilities” the company has announced to date. During the quarter, Microsoft unveiled plans for a significant investment in OpenAI, a leading AI research organisation. As part of this investment, Microsoft announced that it would integrate OpenAI’s cutting-edge artificial intelligence models into its Bing search engine and Microsoft 365 productivity software to enhance their capabilities and ensure a more personalised user experience.
Technical Analysis:
The Weekly chart of Microsoft shows that the price action has recently breached the $305.56 resistance level (black dotted line) and will be watched closely for a retracement. For the bull case, an opportunity potentially exists for recent positive sentiment to carry the price action higher toward the primary price resistance at $316.10 (green line).
Should the $305.56 level fail to act as sufficient support for the bulls, the bears could see the price action on Microsoft decline toward lower support levels at $292.16 or $281.58 (black dotted lines), a share level toward the primary support level at $270.25 (red line).
Alphabet Inc. (NASDAQ: GOOGL)
From smartphones to self-driving cars, Google’s innovations have become indispensable to modern life. With the technology juggernaut having already transformed our world in countless ways, it would be silly to discount Alphabet on how it plans to evolve the digital landscape in years to come.
Fundamental Analysis:
Much like Microsoft, Google’s parent company, Alphabet Inc., exceeded analyst expectations, reporting a quarterly earnings per share (EPS) figure of $1.17, representing a 9.21% beat on general market consensus estimates of $1.07 per share. Quarterly revenue came in at $69.79 billion, slightly higher than analyst expectations of $68.81 billion.
On Tuesday, the 25th of April, Alphabet informed market participants that its board of directors authorised $70 billion in share buybacks. This decision comes approximately one year after the multinational conglomerate announced $70 billion in share buybacks in April 2022. While much speculation exists about the feasibility and benefits associated with share repurchase programs, the Oracle of Omaha, Warren Buffett, has referred to critics of share buybacks as being “economically illiterate,” and it appears that Alphabet follows the same belief. After all, share repurchase programs result in existing shares becoming more valuable to shareholders by reducing the number of shares outstanding.
Technical Analysis:
For the bull case, an investment opportunity could exist if the price action pushes above $107.20 (black dotted line), which could be the first resistance point in the price for the bulls. If the share price breaches the resistance level at $107.20, the possibility exists for the bulls to carry the price action toward the primary resistance level at $122.35 (green line).
If the bears take control, then we could possibly see the price action retrace and decline toward lower support levels, with the primary support level at $84.62 (red line).
Meta Platforms Inc. (NASDAQ: META)
Meta Platforms Inc., formerly known as Facebook, continued the impressive streak of solid earnings reports from big tech companies with its latest quarterly results released on Wednesday, the 26th of April. The announcement was met with a positive response from investors, who rallied behind the social media giant’s billionaire CEO, Mark Zuckerberg, as he garnered support for his cost-cutting measures.
Fundamental Analysis:
Positive sentiment saw Meta’s share price rise to a 14-month high as the company boasted an impressive 31% beat on its earnings expectations, reporting a quarterly earnings per share (EPS) figure of $2.54 against consensus estimates of $1.95. Moreover, Meta saw its quarterly revenue top estimates by about 3.57%, coming in at $28.64 billion against expectations of $27.66 billion.
Technical Analysis:
The impressive rally on Meta’s share price last week has seen the company’s price action near the $243.55 resistance level (black dotted line). For the bull case, an investment opportunity could exist if the price action pushes above $243.55, which could be the first resistance point in the price for the bulls. Should this resistance level be breached, the possibility exists for a rally toward the primary price resistance at $293.51 (green line).
For the bear case, the possibility exists for the price action to retrace and decline toward lower support levels at $202.69, $186.03, and $168.28 (black dotted lines), a share level toward the primary support level at $90.00 (red line).
Sources: Bloomberg, CNBC, Forbes, Reuters, Trading View
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