MSFT and AI
People want to see a payoff.
Earnings are everything, especially when stocks are priced the way they are right now. Expectations are high, and failure to meet them will be met with selling.
That’s just the way it works.
The major indexes settled into familiar patterns on Monday, and they’ll probably look similar today – mixed to negative or maybe mixed to positive, little conviction, waiting…
Big Tech earnings so far have left investors, traders, and speculators wanting more, or at least something, to show for the billions of dollars management teams are pouring into artificial intelligence.
While they’re rotating into small-caps and other sectors and industries, they’re rotating out of AI stocks.
Alphabet $GOOGL tumbled last week because capex spending was up big but AI revenue simply isn’t measuring up.
Something has to happen to change that narrative or there will be downside.
The action begins with the closing bell.
The big question today is how close Microsoft is to turning its tight relationship with OpenAI and ChatGPT into actual cash flow.
Investors, traders, and speculators want to start to see some return on all that artificial intelligence capex. If it’s going to happen, observers expect it to happen for Microsoft first.
Everybody is waiting for an AI payoff.
The consensus expectation according to data compiled by Visible Alpha is for Microsoft’s Azure cloud computing unit to report sequential sales growth of 31 percent, consistent with first quarter growth.
Capex was likely $13.64 billion, up 25 percent quarter over quarter and 53 percent year over year.
MSFT was up 0.34 percent on Monday and traded up 0.06 percent early in after-hours trading.
Microsoft management will host a conference call at 5:30 p.m. ET.
