31 July 2024
If you are covering Microsoft or AMD’s results, please see the following comment from Ben Barringer, technology analyst at Quilter Cheviot:
Microsoft
"Microsoft's stock was down 7% after hours due to a slight miss in cloud growth. However, the company made reassuring comments on the earnings call, highlighting that demand remains solid but is currently supply-constrained. It is spending to build more datacentres, but supply constraints will result in slightly slower growth initially, followed by an acceleration in the subsequent six months.
"Despite the cloud growth miss, Microsoft's total revenue increased by 16%, with solid bookings and backlog. The company emphasised that they are making investments driven by demand and ensuring solid returns on these investments. The guidance provided was strong, reflecting confidence in its comprehensive product offerings. While growth is strong, it is levelling out rather than accelerating, which is good but does not necessarily translate into big moves on its share price.
"But patience is required as data preparation and AI integration into business processes take time. Overall, this set of numbers should be reassuring and help alleviate some fears of a significant AI downturn."
AMD
"AMD reported a small beat and raise, demonstrating that its products are gaining traction in the market. This is a positive development, especially considering previous concerns about the quality of its offerings. The PC business is showing signs of recovery and are taking market share from Intel.
"While the gaming and embedded sectors are currently facing headwinds, we think these will turn into tailwinds by 2025. Despite recent weakness, AMD's stock was up 7% after hours, reflecting growing investor confidence in the company's prospects.
"Overall, this performance highlights AMD's resilience and potential for continued growth, reassuring investors about the company's strategic direction and market position."
