Spotify (SPOT) +10%
Impressive Q3 outcomes for Spotify show an 11% year-over-year boost in revenue, fueled by a robust performance in both premium and ad-supported segments, which recorded respective growth rates of 10% and 16%.
The number of active users has soared by 26% compared to the previous year, reaching 551 million. When it comes to paid subscribers, Spotify maintains a substantial lead with 226 million in Q3, surpassing Apple Music and YouTube Premium, which reported 88 million and 80 million subscribers, respectively, as of their last disclosures in 2022.
Notably, Spotify has managed to shift from an anticipated operating loss to an operating profit, achieved through reducing marketing expenses, workforce downsizing, and increasing premium subscription pricing.
Given these encouraging results and Spotify’s unwavering position as a market leader in audio streaming, the share price deserve to surge by 10%.
Bitcoin (BTC) +10%
This has nothing to do with earnings but it’s worth noting that Bitcoin experienced a 10% surge in a day.
Unlike a previous instance, which was triggered by false reports of the SEC granting approval to a spot Bitcoin ETF, this recent increase lacked a specific catalyst.
Bitcoin’s price has now surpassed $30,000, reaching approximately $34,000. In contrast, just last November, its price stood at a mere $16,500. Thus, the price has doubled within a year.
Bitcoin’s run appears to be gaining momentum, offering crypto enthusiasts something to cheer for.
Microsoft +4% after hours
The world’s second-largest company by market capitalization, Microsoft, has achieved a 13% increase in revenue and a remarkable 27% rise in net profits compared to the previous year. This demonstrates that large corporations can still experience rapid growth, indicating that concerns about the current economic climate may have been exaggerated.
The ongoing success of Microsoft in the realm of artificial intelligence (AI) is likely a contributing factor, with Azure revenue increasing by 29% year-over-year, showcasing an acceleration compared to the previous quarter’s 26% growth. Microsoft’s Chief Financial Officer anticipates that this growth will be sustained at a rate of 26% to 27% in the coming six months, driven by the increasing adoption of AI.
An additional notable development is the resurgence of growth in Microsoft’s Windows OEM segment, effectively reversing the negative trends observed over the past four quarters. This uptick may signify a potential turnaround in PC shipment numbers. Moreover, other segments such as office and enterprise businesses are experiencing robust double-digit growth, suggesting increased corporate spending and a more optimistic economic outlook.
Bing + ChatGPT remains a forgotten child as it has not managed to significantly challenge Google Search’s dominance in the market.
Alphabet -6% after hours
Alphabet wasn’t as lucky as it saw its share price plunged 6% during after market hours.
In terms of financial performance, Alphabet recorded an 11% increase in revenue and an impressive 42% rise in profits. These are good numbers, especially when considering that revenue growth had been in the single digits in previous quarters. So why the unfavorable market response?
The primary issue appears to be related to Google Cloud, as it fell short of estimates. Despite growing by 22% year-over-year, it’s important to note that Microsoft Azure outpaced it with a 29% growth rate. Given that Azure is larger than Google Cloud and growing more rapidly, it suggests that Microsoft has been gaining market share in the past quarter, putting Alphabet on the back foot in terms of catching up.
Nonetheless, the situation may not be as dire, and it’s plausible that the share price will eventually rebound, barring a broader market correction or crash.
There’s also some encouraging news regarding YouTube, with its revenue increasing by 12% year-over-year in this quarter. In the previous quarter, YouTube had seen a decline in revenue, so this rebound indicates that advertisers are returning, and YouTube has managed to increase its revenue despite the competition from the rising TikTok platform.
The results from the initial two major tech companies have shown signs of improvement and faster revenue growth compared to previous quarters, which could bode well for the forthcoming tech earnings reports.
