US and European futures are trading lower as traders are digesting the earnings from mega techs, which largely disappointed many investors. Both Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) suffered brutal losses yesterday on the back of their earnings, and the message was highly synchronized: cuts in headcounts and growth is shrinking. The saga of mega tech earnings isn't over, as we will have giants like Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) report their earnings this week, and their results could take a further serious toll on the risk sentiment.
The quarterly earnings reports for Boeing (NYSE:BA) and Kraft Heinz (NASDAQ:KHC) are scheduled to be released today before the opening bell, and traders anticipate additional Big Tech earnings from Meta Platforms (NASDAQ:META) following the opening bell.
Earnings
Alphabet missed the analyst's numbers by a large mile in its earnings reports last night. Revenue its company's main business, YouTube, suffered, and the situation looks even dire when one compares the number the street's expectations which was expecting growth of about 3%. In fact, the numbers displayed confirmed last night that the company reported its weakest growth of 6% since 2013, apart from the pandemic period.
Alphabet reported earnings per share (EPS) of $1.06 against the expectations of $1.25 and produced revenue of $69.09 billion against the forecast of 70.42. YouTube's advertising revenue was $7.07 vs $7.42 billion. The stock is expected to get even more hammered today as it fell over 6% after its earnings report last night and this is purely because it is largely difficult to see anything positive in the last night's numbers.
Microsoft also failed to impress investors last night and the stock plunged over 6%. Cloud revenue was lower than expected and for traders, this was the main story not only for Microsoft and also an indication for the rest of the economy. Further evidence of this argument was supported in the company's guidance which fell short of expectations. The message is simple from Microsoft, which is that it wants to moderate its operating cost as growth continues to remain a concern.