The Smart Way to Play These Earnings Top Movers

Shah Gilani|July 27, 2023

The bull market continues in earnest, with markets barely seeming to notice the FOMC’s 25-bps rate hike this week. Many investors are confident that this is the last rate hike in the cycle, and Powell’s caginess about it doesn’t seem to be causing much doubt.

That means earnings are still at the forefront of what investors are watching, especially now that we’re starting to get reports from other sectors, including Big Tech. Meta Platforms Inc (META) blasted off after crushing consensus estimates in their report and seemingly returning to the priorities that originally brought them into prominence – a focus on social media growth and ad impressions.

In other words, they were notably quiet about the metaverse. And investors loved it.

Other big names didn’t fare as well, with Microsoft Corporation (MSFT) taking a hit despite beating estimates on both EPS and revenue growth, and even coming out ahead year-over-year – notable because lowered expectations across the board during this season are making some “earnings surprises” look rosier than they are.

The headwind pushing this dip is a slowdown in the growth of their cloud computing revenue, down to 26% from its highs of about 50% three years ago.

So we’ve got one tech giant that crushed earnings and soared, and one tech giant that crushed earnings and sank a bit.

This is a good reminder that while earnings are important, the immediate price action that follows can be a bit fickle, and finding the smartest plays out there means taking that information in context, filtering out the noise, and looking at the bigger picture.

And that’s exactly what we’re doing in today’s Buy This, Not That. Check it out:

[bc_video video_id=”6331939416112″ account_id=”4250799609001″ player_id=”hpkprVYKS6″ embed=”in-page” padding_top=”56%” autoplay=”” min_width=”0px” playsinline=”” picture_in_picture=”” max_width=”640px” mute=”” width=”100%” height=”100%” aspect_ratio=”16:9″ sizing=”responsive” ]

Like I said in the video, right now I’m tracking some major opportunities in the next big frontier of tech development – AI and the next generation of computer chips that AI runs on. The companies I’m targeting may not be big names like Microsoft or Google, but they have even more profit potential.

I’ll be back tomorrow with more on that. Stay tuned until then.