4 big earnings reports: Meta crushes estimates; Amazon disappoints | Pro Recap

Investing.com — Here is your Pro Recap of the biggest earnings reports you may have missed this week: Impressive earnings beats at Meta, Microsoft, and Alphabet, and disappointment at Amazon.

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Meta’s ‘year of efficiency’ pays off in Q1

Facebook operator Meta (NASDAQ:) was recently flying 14% higher Wednesday after earnings smashed estimates amid its declared “year of efficiency” – employee headcount fell 1% in Q1 due to layoffs – and an uptick in ad revenue.

All in all, the company EPS of $2.20 versus the $2.02 average analyst estimate. Revenue of $28.65 billion was also ahead of consensus, and Meta said 2Q sales should range from $29.5B to $32B, above estimates of $29.47B.

JPMorgan boosted the stock’s price target by $35 to $305 given the acceleration of revenue growth toward double digits. Goldman Sachs lifted the price target to $300 from the prior $245, noting:

“While some debates may persist around near-term revenue growth recovery/trajectory in the quarters ahead, we continue to see META as well-positioned against a number of long-term secular growth themes.”

InvestingPro subscribers got these headlines in real time, giving them an edge in their portfolios well before market open.

Amazon beats on Q1 but deflates investors with sour cloud revenue news

On Thursday, Amazon (NASDAQ:) said it earned $0.31 per share, easily surpassing analyst estimates of $0.21. was also better than expected at $127.4B.

The stock initially popped higher after hours on the results, which encompassed 16% growth at cloud revenue segment Amazon Web Services to $21.35B.

But shares reversed to a decline during the earnings call Thursday evening when the company said customers are tightening up spending on cloud services in Q2 amid “tough economic conditions,” leading to a 500-basis-point decline April revenue growth rates.

Overall, the company expects Q2 revenue of $127.0B to $133B and operating income of $2.0B to $5.5B, in line with analyst expectations.

Shares were losing 2% in after-hours trading Thursday.

After Alphabet’s positive Q1, say analysts, ‘we’d be buyers of GOOGL shares’

Google parent Alphabet (NASDAQ:) (NASDAQ:) beat expectations on the top and bottom lines with of $1.17 and revenue of $69.79B. The company also said it would buy back $70B in shares.

The stock initially rose on the announcement but lost ground in the regular session after the CFO started discussing aggressive capex outlook and hiring plans for 2023 on the earnings call.

Analysts highlighted strength in Alphabet’s search business and positive momentum in cloud. Oppenheimer hiked the price target by $10 to $145, citing stabilizing ad trends.

And Roth MKM has a new price target on GOOGL stock, $134. The analysts said “we’d be buyers of GOOGL shares” ahead of several potential catalysts next month: “Google I/O (May 10), Marketing Live (May 23), and the advertising industry’s Upfronts and Newfronts events scattered across May.”

Microsoft delivers, leaving analysts ‘impressed’

Microsoft (NASDAQ:) jumped 7% higher Wednesday on better-than-expected fiscal as its cloud business underpinned performance, shrugging off fears that slowing consumer spending would weigh on growth.

EPS totaled $2.45, beating the $2.24 average Street estimate, and revenue also topped expectations at $52.9B, encompassing 31% top-line growth at key cloud business Azure.

Microsoft shares are up about 15% so far this year, riding on investor optimism about the tech giant’s lead in the AI race following a multi-billion-dollar investment in ChatGPT developer OpenAI.

Oppenheimer lifted the stock’s price target to $330 on the “impressive” results, while JPMorgan called the results “resilient” and also hiked its price target, to $315. JPMorgan assessed, “AI was mentioned 50 times during the earnings call and is clearly driving a reassessment of Microsoft’s value prop and differentiation.”

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Senad Karaahmetovic, Yasin Ebrahim, and Liz Moyer contributed to this report.