What To Say When Anyone Asks You What You Think Of Big Tech
Spoiler alert: Not What Everyone Else Is Saying!! Read on.
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On Main Street Things Look Just Fine
Amongst the many tech companies that we cover in our work, few have so far reported a bad Q3. We’ve had a couple of “meh” reports; and we’ve had reports with numbers that should have caused a “meh” reaction, but didn’t, because the market wasn’t really focused on Q3 numbers for that name, instead some other narrative. But actual bad quarters? Nope.
Which begs the question, of course, why has the Nasdaq done this since the start of Q3?
Those of you who read our Market Insight Substack get updates daily on market direction, Nasdaq included. (If you’ve yet to sign up for Cestrian Market Insight, you can do so right here). If you’ve had a chance to read those updates you’ll know that we see the dump since July as, in essence, a technical selloff, the result of fear-bunnies being let loose in the streets triggering right-thinking folks everywhere to part company with their stocks so that market bigs can buy them at lower prices instead.
We don’t see the dump as earnings related. Moreover, we anticipate a run up in the indices towards year end.
But back to actual companies.
Let’s take a look at last week’s earnings. It was a big week. We had Microsoft, Meta Platforms, Amazon, Intel and others. How did they fare?
According to the media? “Mixed”. “Underwhelming”. “Problematic”.
Er, no.
The real answer - you know, based on actual numbers - is, very well indeed. All four companies delivered improved revenue growth vs. the same quarter last year, in other words, the rate of growth of revenue moved up in Q3 ‘23 vs. Q3 ‘22 compared to Q2 ‘23 vs. Q2 ‘22. That might not sound very exciting but it is the essence of Number Go Up. All four delivered balance sheet improvements compared to last quarter. And all stocks reacted positively to the print. Some have sold off a little since the print, but the moves up on each print we positive indeed.
Here’s a brief run-through of each of those four sets of earnings. We include our stock rating, long-run price target, valuation analysis and stock chart on each name.