From Nasdaq:

This week, tech giants Alphabet and Microsoft have reported their quarterly results. Although both companies exceeded expectations, their stock took a hit in the market. Over the last year, Alphabet and Microsoft’s stock have seen significant growth, encouraging investors to consider today’s selloff as a buying opportunity.

Despite the strong Q4 earnings of $1.64 per share and quarterly sales of $72.32 billion, Alphabet’s stock has dropped following underwhelming ad revenue. On the other hand, Microsoft’s Q2 earnings of $2.93 per share and second quarter sales of $62.02 billion surpassed expectations.

Alphabet’s revenue jumped 14% from a year ago, while Microsoft saw a 17% increase from the previous year. Microsoft’s strong quarter was attributed to growth in Azure and other Intelligent Cloud Segment services, but its sales guidance for the third quarter fell short of expectations.

Both Alphabet and Microsoft are forecasted to have double-digit percentage growth on their top and bottom lines in fiscal 2024. Current valuations show Alphabet’s stock as more attractive with a P/E valuation of 22.6X forward earnings, near the S&P 500’s 20.8X.

Despite today’s selloff, long-term investors could still be rewarded from current levels, as both Alphabet and Microsoft land a Zacks Rank #3 (Hold) and have reasonable P/E valuations supporting potential growth in the future. Check out the just-released Zacks Top 10 Stocks for 2024, handpicked by Zacks Director of Research, Sheraz Mian, with enormous potential.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc. To read more, visit Zacks.com.



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