Meta Platforms And Microsoft Blowout Earnings Reaction: Where Do They Go From Here?

Benzinga

Both Mark Zuckerberg's Meta Platforms and Satya Nadella's Microsoft surged higher after reporting their earnings for the latest quarter after market close yesterday. Benzinga's Ryan Faloona analyses the news and takes a look at where the stocks may go next on Premarket Playbook.

Transcript

00:00um meta beats q2 earnings estimates meta reported second quarter financial results after the market

00:06closed on wednesday here's a rundown of that report meta reported second quarter revenue of

00:1147.52 billion beating analyst estimates of 44.58 billion that's according to benzinga pro

00:17the company reported second quarter earnings of 714 per share beating analyst estimates of 5.79

00:23per share oh my god what that is just a big beat there total revenue was up 22 on a year-over-year

00:31basis family daily active people climbed six percent year-over-year to 3.48 billion and

00:38ad impressions jumped 11 year-over-year an average price per ad increased by nine percent year-over-year

00:46so just absolutely blowing it out there operating margins totaled 43 which is up 38

00:52in the prior quarter costs and expenses came in at 27 billion which is up 12 year-over-year we would

00:59expect that with the ai move capital expenditures including principal payments on finance leases

01:04came in at 17 billion meta noted its headcount was up seven percent year-over-year to 76 000 just about

01:12as of june 30th uh meta generated 25.56 billion in cash flow from operations and 8.55 billion in

01:22free cash flow during the quarter the company ended the quarter with 47.07 billion in cash and cash

01:28equivalent and marketable securities quote we've had a strong quarter both in terms of our business

01:35and community i'm excited to build personal super intelligence for everyone in the world super

01:40intelligence a new mesh a new mention there uh and that again that came from zuck zuckerberg the

01:46guidance here meta expects third quarter revenue to be in the range of 47 and a half billion to 50 and a

01:51half billion versus the estimate of 45 billion so in addition to the huge beat actually got a huge

01:57guidance boost there and that explains why the stock is just absolutely popping here today um

02:03let's see let me go but i lost my place there sorry about that uh meta expects full year 2025

02:09expenses to be in the range of 114 to 118 billion the company anticipates full year capital expenditures

02:16of 66 to 72 billion quote while we are not providing an outlook for fourth quarter revenue we would

02:22expect our year over year growth rate in the fourth quarter for 2025 to be slower than the third quarter

02:28as we lap a period of stronger growth in the fourth quarter of 2024 meta's management team also had the

02:34conference call and that continued to trade up from there so meta just a huge beat here um let me see

02:42if i can go back there all right so here's where this is the craziest part about this entire thing

02:47the chart basically had this rolling over and retesting a pretty key support area we were testing the

02:54trend line and for those of you that are here every day you've seen how these trend lines have really

02:59really come into play whether it be a trend line break or a trend line support or something like that

03:04we were getting that again here and that trend line just so happened to line up pretty well with the 50

03:10day moving average and today well plus 80 points we are up here 775 this is going to be a new all-time

03:17high we are breaking above this giddy up this is just an absolutely huge report and the rsi was kind of in

03:24the middle of the channel so my thought here is that this might actually continue for a little bit maybe

03:30we get a little profit taking here on meta especially in the morning but this run after a quality report

03:35like that you can see some more legs to this run so really really just a blowout report meta holding

03:41higher by 11 and a half percent here this morning up 80 points and look at the chart we came off this

03:47really important area uh here so just a huge huge move now let's see if the chart is going to cooperate

03:54and give us the microsoft chart to start with indeed it is look at this move on microsoft the the huge

04:01gap up from april 30th i believe this was their last earnings and this thing has just been melting

04:05up staying above the 20-day moving average all the way to the highs here you would think to yourself

04:12well this kind of ran into earnings so maybe this pulled back no no it didn't meta plus eight or excuse

04:18me microsoft plus 8.23 percent here today again option buyers winning this print as we continue to pop

04:25the highest stock is at 555 i have to readjust my chart i didn't even have enough upside movement

04:30here here you go here is 555 50 if five is your lucky number uh take a drink or go buy a lottery

04:36ticket or something huge pop here on microsoft now let's dive into the actual uh report here itself

04:43i reported fourth quarter financial results after the close and they reported revenue of 76.44 billion

04:50which was up 17 year over year the total revenue beat a street consensus of 73.8 billion according

04:57to data from benzinga pro the company reported fourth quarter earnings per share of 365 beating

05:02street consensus of 337 uh they reported revenue by segment productivity and business processes 33.1

05:10billion that's plus 16 year over year intelligent cloud 29.9 billion plus 26 year over year and more

05:19personal computing 13 and a half billion that was plus nine percent year over year immediate takeaway

05:25immediate takeaway from the microsoft print here and the cloud computing beat and and uh numbers that

05:31they posted here that absolutely should be good for amazon and amazon web services which we get here

05:37tonight so just uh just a monster report here i want to definitely want to see how uh microsoft trades

05:45here today but again amazon was up on the back of this report uh no surprise there the company

05:50reported that microsoft 365 commercial cloud revenue increased 18 year over year microsoft 365 consumer

05:58cloud revenue was up 20 year over year in the quarter with the intelligent cloud segment revenue from azure

06:04and cloud services increased by 39 year over year just just absolute absolute monster numbers good morning

06:11mayhem uh microsoft as he's saying here microsoft's cloud growth very very impressive google's cloud

06:18growth and investment also encouraging for amazon so probably expecting some numbers out there we'll see

06:23if that gets priced in in today's session uh xbox content and services revenue was up 13 year over year

06:30in the quarter overall cloud revenue was 46.7 billion in the quarter representing a 27 year over year

06:37increase across various segments the company's full fiscal year revenue was at 281.7 billion dollars

06:45that's up 15 percent year over year and full year earnings per share were 1364 that's up 16 percent

06:52year over year quote cloud and ai is the driving force of business transformation across every industry

06:59and sector end quote that comes from microsoft ceo satya nadella who goes on to say we're innovating

07:05across the tech stack to help customers adapt and grow in this new era nadella said azure surpassed

07:1375 billion dollar revenue milestone for the full fiscal year representing a 34 percent year over year

07:21increase the company will provide an update it did on a earnings call i'm sorry i keep reading that

07:26just just monster here for microsoft monster move for microsoft again i want to see if any of this

07:31uh gets priced in for amazon here today i want to see where microsoft goes mayhem i can't wait to see

07:38if we jump any of these call walls and go higher should give us an idea of where that range might be

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