Market Rally Faces Key Test Next Week as ‘FAAMG’ Earnings Loom Large
Wall Street’s second-quarter earnings season shifts into high gear next week with some of the biggest names in the market set to release financial results. With the S&P 500 and Nasdaq Composite hovering near their best level in 15 months, most of the focus will once again be on the ‘Big 5’ group of mega-cap companies.
Microsoft will be the first ‘FAAMG’ company to report earnings when it delivers its latest quarterly results after U.S. markets close on Tuesday, July 25, at 16:05 ET (20:05 GMT).
The Redmond, Washington-based software-and-hardware giant is forecast to post double-digit profit growth as well as a modest increase in revenue growth, reflecting solid demand for its cloud computing products.
Unsurprisingly, an InvestingPro survey of analyst earnings revisions points to mounting optimism ahead of Microsoft’s report, with analysts raising their EPS estimates 23 times in the last 90 days, compared to three downward revisions.
Consensus estimates call for earnings per share of $2.55 for its fiscal fourth quarter, improving 14.3% from a profit of $2.23 in the year-ago period amid the positive impact of reduced operating expenses and ongoing job cuts.
Meanwhile, sales are expected to grow 7% annually to $55.48 billion, thanks to a strong performance in its cloud business as well as fresh initiatives in artificial intelligence.
If those figures are confirmed, it would mark the best quarter in Microsoft’s 48-year history, demonstrating the strength and resilience of its operating business as well as strong execution across the company.
Microsoft surpassed expectations on both the top and bottom lines in the last quarter and beat estimates on quarterly revenue guidance as well, sending shares higher by 4.8%.
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