Microsoft and Meta stocks slip as investors demand more

Microsoft and Meta stocks have tumbled in after-hours trading despite both tech giants posting better-than-expected results yesterday.

Microsoft reported a 16 per cent revenue increase to $65.6bn (£50.5bn) against a forecasted $64.5bn (£49.7bn), fuelled by its cloud services which grew by 33 per cent.

Earnings per share (EPS) came in at $3.30 (£2.54), easily beating expectations of $3.09 (£2.38). But investors didn’t bite and Microsoft’s shares slipped over four per cent after hours.

“Microsoft hasn’t been the hottest stock of late,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“But there’s still scope for improvement, the partnership with OpenAI is acting as a drag on performance as Microsoft rents out valuable compute to the ChatGPT maker at discounted prices.”

Meta falls more than Microsoft

Meta shares sank over 4.3 per cent in New York after hours.

The company, which has ridden a 25 per cent share price rally over the last two months, beat Wall Street’s forecasts with $40.6bn (£31.3bn) in sales – a 19 per cent rise year on year, versus expectations of $40.19bn (£30.96bn).

Earnings per share landed at $6.03 (£4.64), comfortably above the forecasted $5.29 (£4.07).

Meta has now outperformed revenue expectations for eight consecutive quarters and EPS forecasts for seven.

“Under normal circumstances, such a run would be hailed as truly remarkable,” said Dan Coatsworth, investment analyst at AJ Bell. “Unfortunately,…one key operating metric came up short.”

He added: “While the number of daily active users for its social media platforms and apps continues to grow, the five per cent increase to 3.29bn individuals missed the 3.31bn market forecast.

“It’s not simply enough for Meta to move ahead, it needs to stay in the fast lane at all times as far as the market is concerned. Investors typically care about the short term and they want more, more, more.”