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    Snap soars on surprise profit beat, strong revenue forecast

    enApril 26, 2024

    Podcast Summary

    • Tech Giants Snap and Alphabet Report Strong Earnings and Stock GainsSnap surpassed expectations with a profit and projected revenue growth, leading to a 25% premarket increase. Alphabet reported a 15% revenue increase, authorized a $70B share buyback, and declared a $0.20 per share cash dividend.

      Tech giants Snap and Alphabet reported strong earnings for Q1 2024, leading to significant stock gains. Snap surpassed expectations with a quarterly profit and projected revenue growth, while Alphabet saw a 15% revenue increase and announced its first dividend. Snap's surprising profit beat and revenue growth above expectations, driven by improving advertising sales and increased Snapchat usage, resulted in a 25% premarket increase. Daily active users grew by 10% year over year, and advertising revenue increased by 16%. Snap also reported progress in diversifying its revenue sources with its Snapchat Plus subscription growing to over 9 million members. Alphabet reported strong earnings, with revenues up 15% and advertising revenue up 13%. YouTube, a concern for some investors, saw a full 21% increase in ad revenue. Google Cloud continued its momentum with 28% revenue growth and quadrupled operating income year over year. Alphabet also authorized a $70 billion share buyback and declared a $0.20 per share cash dividend. Despite reaching all-time highs, Seeking Alpha analyst Lucas Ma of Envision Research believes there is still significant upside potential for Alphabet's stock.

    • Microsoft's Q3 Earnings Beat and Share Buyback Plan Boost MarketMicrosoft reported earnings of $2.94 per share on sales of $61.86 billion, surpassing expectations. Its intelligent cloud division saw a 31% revenue increase. The results helped boost the market, with Microsoft's strong performance offsetting earlier market declines.

      Microsoft's strong financial performance, as indicated by its earnings beat and significant share buyback plan, underscores its impressive profitability and reasonable valuation. In the third quarter ending March 31st, Microsoft reported earnings of $2.94 per share on sales of $61.86 billion, surpassing analyst expectations. Notably, the intelligent cloud division, which includes Azure, saw a 31% year-over-year increase in revenue. Despite the Nasdaq and other major indices experiencing significant declines earlier in the week, Microsoft's results helped boost the market, with Dow, S&P, and Nasdaq futures all trending upwards as of 6 AM. Other notable news included Hertz's 20% slide due to Tesla's impact on its bottom line, Honda's $1 billion investment in Canadian electric vehicle expansion, and the FCC's vote to reinstate net neutrality rules. Intel, however, saw a 7% drop after missing the top line in its Q1 results despite 9% year-over-year growth. In today's economic calendar, personal income and outlays and consumer sentiment are scheduled for release at 8:30 AM and 10 AM, respectively. Lastly, two stocks that made headlines today, Snap and Microsoft, share a connection - they both had IPOs in 2017.

    • March: A Popular Month for Companies to Go PublicMicrosoft and Snap both debuted in the stock market in March, highlighting the significance of this month for companies embarking on their public journeys. Stay informed about such key events and trends as an investor.

      Despite the significant time gap between their initial public offerings, Microsoft in 1986 and Snap in 2017, both companies marked their milestone entries into the stock market in the same month of March. This interesting fact underscores the enduring significance of March as a popular month for companies to embark on their public journeys. For investors, staying informed about such key events and trends can provide valuable insights and opportunities. To stay updated on the latest news and analysis on significant stocks and ETFs, consider becoming a Seeking Alpha premium subscriber. Visit seekingalpha.com/subscriptions for more information. I'm Julie Morgan, and I look forward to bringing you more insights on Wall Street. Make it a great day!

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