As the earnings season heats up and the U.S. election draws near, the financial markets have been buzzing with activity and significant movements by some prominent players. Here are the noteworthy stocks that have captured the attention of Investing.com this week:
• Big Tech (Earnings): Microsoft (NASDAQ:) disappoints, Amazon (NASDAQ:) Up
Microsoft, a tech behemoth, released its latest quarterly earnings on Wednesday, surpassing expectations in terms of earnings and revenue. Despite this positive outcome, the stock took a hit, plummeting over 6% the next day. The company attributed this decline to an anticipated slowdown in the upcoming quarter due to supply chain issues, particularly delays in third-party infrastructure essential for AI capabilities. Analysts at BMO Capital expressed slight disappointment with the guidance for the next quarter, indicating an impact on revenue as a result of imbalances in supply and demand.
Conversely, Amazon’s shares soared by 6.7% after exceeding earnings and revenue projections, fueled by improved retail sales that boosted profits. Citi analysts shared optimism about the company’s ability to invest in growth while achieving substantial margin expansion. They highlighted how efficiency gains in Retail have lowered Amazon’s cost, leading to accelerated delivery, improved conversion rates, and increased spending across essential products.
• Apple (NASDAQ:) also reported earnings that surpassed expectations but witnessed a decline in its stock on Friday. Investors reacted negatively to the guidance provided by the company.
• SMCI
Another stock that faced challenges this week was SMCI, suffering a substantial drop of over 32% following the sudden resignation of Ernst & Young LLP (EY) as the company’s registered public accounting firm. The resignation was due to EY’s inability to rely on the company’s representations and expressed concerns about the financial statements, resulting in a significant decrease in SMCI shares amidst financial uncertainty.
• Estee Lauder (NYSE:)
Beauty company Estee Lauder faced a rough week, marked by a 20% decline on Thursday and a further 2% dip on Friday after reporting a revenue miss and withdrawing its fiscal 2025 outlook. Ongoing issues in China and travel retail contributed to this decision, leading to a reduction in the quarterly dividend and a lower-than-expected F2Q outlook. Consequently, JPMorgan downgraded Estee Lauder to Neutral, citing uncertainties in the market and advising investors to wait for signs of improved demand before making decisions.
In conclusion, this week has seen a rollercoaster of events in the world of finance, with notable companies experiencing both highs and lows. Investors must remain vigilant and cautious in navigating these turbulent times, considering the impact of various external factors on market dynamics.
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