Microsoft consolidates itself as the largest in the world after balance sheets – 02/02/2024 – Tech

This week’s balance sheets confirmed the consistency of the American consumer market and the traction of advances in artificial intelligence on the performance of six of the seven technology giants — Microsoft, Apple, Amazon, Nvidia, Google and Facebook, ordered by market valuation. Tesla had already announced results on January 24

The numbers released give Microsoft a safe margin at the top of the ranking of the most capitalized companies in the world.

The company’s shares, with a daily increase of 2%, were traded at more than US$411 this Friday (2), which guaranteed a valuation of US$3.04 trillion (R$15 trillion) — around twice Brazil’s GDP.

The company had already surpassed the US$ 3 trillion level on the 24th.

In the last quarter of last year, the Windows creator’s revenue rose 18%, to US$62 billion, at a pace unprecedented since 2022, according to a balance sheet released on Wednesday (30), after the stock exchange closed.

Expectations were such that on Thursday (1st) the company’s shares depreciated, a trend that was reversed this Friday, when the company’s shares closed at a record value.

In 2023, Microsoft advanced on several fronts: it sealed the partnership with the creator of ChatGPT, OpenAI, showed the weight of cloud services, such as Azure, and overcame the regulatory risks linked to the acquisition of video game studio Activision Blizzard, by US $68.7 billion.

In addition to the 24% increase in earnings in the area of ​​cloud services with Azure, the company’s revenue from video games grew 60%, of which 55% is linked to the purchase of Activision Blizzard.

“This result in video games works like a cherry on the cake,” says the chief analyst at brokerage Investing.com, Thomas Monteiro. “Microsoft grows very quickly and also diversifies revenues and this is essential in times of future uncertainty”, he says.

Technology companies are also reaping the benefits of layoffs to reduce expenses made since last year.

In this area, the greatest example of success is Meta, whose shares soared more than 20% this Friday, with an increase of more than US$200 billion (R$989 billion) in its market value. The owner of Facebook announced its first dividend and robust results on Thursday.

A few days before Facebook’s 20th anniversary, the company approved an additional $50 billion in share repurchases and said its quarterly dividend would be $0.50 per share.

The social media giant is the first of its generation of internet giants to pay dividends, and the fourth of the so-called “Magnificent Seven”, according to LSEG data.

“The return of cash to shareholders is a bold and well-regarded move,” Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, told Reuters.

The dividend plan will mean a big payday for CEO Mark Zuckerberg, who owns about 350 million Class A and Class B shares of Meta. The Facebook co-founder could receive around US$175 million each quarter.

The measure came in a tough year for the advertising market, with the first expenses to be cut in a context of expensive credit and high interest rates, according to Monteiro, from Investing.com.

The company still presented good results with spending cuts and made room for robust investments in artificial intelligence and the metaverse.

After Nvidia — the big company most driven by the race for artificial intelligence —, Meta was the big tech that grew the most in the last 12 months, with a valuation of 165%.

Amazon’s results released this Thursday also boosted share prices by 6.6% this Friday.

Amazon Chief Executive Andy Jassy said at the earnings call that AI revenues will reach “tens of billions” in the future, helping the company’s shares make further gains even after rising about 50% on the last year.

Amazon shares have risen 55% in the last 12 months, despite the company’s strategy of intentionally keeping profit margins low to increase competitiveness.

At the moment, market alerts are focused on Google owner Alphabet and iPhone maker Apple.

Alphabet’s advertising sales during the holiday season fell short of Wall Street expectations and overshadowed the tech giant’s investments in artificial intelligence and cloud.

In this context, Alphabet recorded revenues of US$65.5 billion (R$325 billion) in the fourth quarter, while analysts estimated, on average, US$66.1 billion (R$303 billion), according to data from LSEG . A year earlier, revenue had been 59.0 billion (R$293 billion).

Alphabet has faced stiff competition for advertising budgets from other online platforms such as Facebook, Instagram, TikTok and Amazon.com in a treacherous financial landscape with high interest rates.

Overall revenue for the quarter ended December 31 was US$86.3 billion (R$428 billion), compared to estimates of US$85.3 billion (R$423 billion), according to LSEG data.

Apple also aroused distrust after announcing its results, although they were positive. The manufacturer exceeded analysts’ expectations with boosts from its services division and iPhone sales. However, it continues to be plagued by concerns about falling performance in China.

Apple’s revenues were US$119.6 billion (R$590 billion) for the quarter to the end of December, an increase of 2% compared to the same period last year.

The numbers surpassed consensus estimates of US$118.3 billion (R$583.7 billion), according to S&P Capital IQ, which interrupts a sequence of four quarters of declining revenue.

Chief executive Tim Cook credited iPhone sales, which rose 6% to US$69.7 billion (R$343.9 billion), and an “all-time revenue record in services”, for the record number of Apple devices —more than 2.2 billion.

Revenues from the App Store, iCloud, Apple Pay and Apple TV registered US$23.1 billion (R$114 billion) in the quarter, an increase of 11% compared to US$20.7 billion (R$102 billion) in the quarter. last year.

Sales to China, however, fell to US$20.8 billion (R$103 billion), compared to US$24 billion (R$118 billion) in the same quarter of the previous year. This is influenced by geopolitical tensions between Beijing and Washington and the resurgence of Huawei, with a new operating system and chips.

The market now awaits the announcement of Nvidia’s results, scheduled for February 22. The company, currently valued at US$1.52 trillion, has appreciated by more than 200% in the last 12 months.

“The chip area shows a pattern in which the company that has the cutting-edge technology always dominates around two-thirds of the market, and Nvidia is profiting from this”, says Monteiro.

The company is, however, considered the riskiest investment by analysts, as its rise is closely linked to enthusiasm for artificial intelligence.

_{With Financial Times and Reuters}