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Stock Market Volatility Is Back, Despite Tech Earnings Growth
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On today’s episode of the Zacks Friday Finish Line, Associate Stock Strategist Ryan McQueeney and Editor Maddy Johnson discuss why stocks erased their year-to-date gains on Wednesday and debate whether earnings from Microsoft, Tesla, Amazon, or Alphabet could save investors from more volatility.
Make sure to subscribe and leave the show a rating on Apple Podcasts!
Stocks were trading sharply lower in early morning trading Friday, putting major indexes on track for one of their worst weeks in recent memory. The volatility comes amid a plethora of familiar headwinds—trade wars, interest rates, and cyclical fears, to name a few—and also during one of the busiest weeks of Q3 earnings season.
One notable reporter this week was Microsoft (MSFT - Free Report) , which tallied strong earnings and revenue growth as its cloud computing initiatives continue to impress. Microsoft also notched 76% growth in its Azure division and reported strong upticks in Office 365 and Dynamic 365.
But Microsoft’s Wednesday afternoon report was almost overshadowed by staggering results from Tesla (TSLA - Free Report) . The electric car giant moved its report date up a few weeks, creating excitement for bulls, and it delivered one of its most impressive quarters to date.
Tesla saw adjusted earnings per share of $2.90 in Q3 2018, crushing the Zacks Consensus Estimate of loss of 55 cents. The company reported loss of a $2.92 per share in the prior-year quarter. Revenue results were also solid, with total sales coming in at $6.8 billion against the consensus estimate of $5.7 billion and the year-ago’s $3 billion.
Earnings results were more mixed the next day, however, as Amazon (AMZN - Free Report) and Alphabet (GOOGL - Free Report) disappointed investors on the top line.
Amazon did crush earnings estimates—$5.75 versus $3.29 expected—but revenue of $56.6 billion missed projections by almost $400 million. Revenue guidance for the holiday period was also light, another worrying sign since the upcoming shopping season is expected to be strong across the board.
Wall Street also shook its head at Google parent Alphabet, which also easily surpassed earnings estimates but missed on the top line. Google saw some positive trends—Ad Revenue grew 29% in the quarter, and Paid Clicks were up 62%—but these were offset by worse-than-expected Cost per Click, down 28%.
On today’s episode, Maddy and Ryan recap all of this week’s noise, presenting investors with exactly what they need to know as volatility rages on. Make sure to check out the show if you want help navigating the news!
If you feel that we missed something, or if you want us to cover a different story, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating on Apple Podcasts.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Stock Market Volatility Is Back, Despite Tech Earnings Growth
On today’s episode of the Zacks Friday Finish Line, Associate Stock Strategist Ryan McQueeney and Editor Maddy Johnson discuss why stocks erased their year-to-date gains on Wednesday and debate whether earnings from Microsoft, Tesla, Amazon, or Alphabet could save investors from more volatility.
Make sure to subscribe and leave the show a rating on Apple Podcasts!
Stocks were trading sharply lower in early morning trading Friday, putting major indexes on track for one of their worst weeks in recent memory. The volatility comes amid a plethora of familiar headwinds—trade wars, interest rates, and cyclical fears, to name a few—and also during one of the busiest weeks of Q3 earnings season.
One notable reporter this week was Microsoft (MSFT - Free Report) , which tallied strong earnings and revenue growth as its cloud computing initiatives continue to impress. Microsoft also notched 76% growth in its Azure division and reported strong upticks in Office 365 and Dynamic 365.
But Microsoft’s Wednesday afternoon report was almost overshadowed by staggering results from Tesla (TSLA - Free Report) . The electric car giant moved its report date up a few weeks, creating excitement for bulls, and it delivered one of its most impressive quarters to date.
Tesla saw adjusted earnings per share of $2.90 in Q3 2018, crushing the Zacks Consensus Estimate of loss of 55 cents. The company reported loss of a $2.92 per share in the prior-year quarter. Revenue results were also solid, with total sales coming in at $6.8 billion against the consensus estimate of $5.7 billion and the year-ago’s $3 billion.
Earnings results were more mixed the next day, however, as Amazon (AMZN - Free Report) and Alphabet (GOOGL - Free Report) disappointed investors on the top line.
Amazon did crush earnings estimates—$5.75 versus $3.29 expected—but revenue of $56.6 billion missed projections by almost $400 million. Revenue guidance for the holiday period was also light, another worrying sign since the upcoming shopping season is expected to be strong across the board.
Wall Street also shook its head at Google parent Alphabet, which also easily surpassed earnings estimates but missed on the top line. Google saw some positive trends—Ad Revenue grew 29% in the quarter, and Paid Clicks were up 62%—but these were offset by worse-than-expected Cost per Click, down 28%.
On today’s episode, Maddy and Ryan recap all of this week’s noise, presenting investors with exactly what they need to know as volatility rages on. Make sure to check out the show if you want help navigating the news!
If you feel that we missed something, or if you want us to cover a different story, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating on Apple Podcasts.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>