I have to hurry this post because Microsoft is about to announce earnings.
For the first time in many years, Microsoft’s earnings are incredibly relevant again.
As many know, MSFT is in the process of successfully reinventing itself… to be a big-time cloud competitor.
Their earnings after the market closes today are important because the market is in desperate need of some kind of clear signal… either that things are still ok in tech land… or they’re not.
It just so happens MSFT is announcing before Apple, Amazon, Google, and Facebook… which means all eyes will be on their report.
Now, Microsoft has a reasonable stage set. Adobe reaffirmed guidance last week… which I believe single-handled stopped the market from another 5-10% slide… since everyone was/is feeling like we’ve driven off a cliff… given tariffs… and global tensions… and interest rate hikes… and Trump acting decidedly unpresidential most of the time.
And Netflix killed their earnings, too, which even though it doesn’t seem like it, also helped provide some footing in this decidedly negative market.
But some disturbing things are still happening. iRobot (IRBT), makers of my favorite electronic device in the world (Roomba!), killed their numbers, too… and the stock was still hammered today… simply because they cited some potential tariff impact… even though they still raised guidance.
What the market wants — craves — now is more assurance… that the consumer is still spending… that interest rates, while increasing, will increase in a slow and measured pace… that oil isn’t going to spike… that tariffs are having a positive effect somewhere in the food chain…
… essentially that the foundation for investment is still sound.
A good report from the once most dominate and influential tech company in the world… that has clawed its way back into relevance… could turn everything on a dime. Stay tuned!
UPDATE: Earnings were solid. Beat on both top and bottom lines. Stock was up almost 5% at one point in the after-hours market. (BTW, Tesla TSLA also reported and nailed it… it’s up over 10% in after hours… and ironically they mentioned tariffs and it doesn’t seem to be impacting the pop.)
Royal Blog 