General Overview
General Overview
Alphabet ($GOOGL) rose about 5% in after-hours trading after exceeding expectations with its first fiscal quarter topping $100 billion — earnings per share (EPS) reached $2.87 and revenue totaled $102.3 billion. Alphabet outperformed expectations for the third quarter.
Microsoft ($MSFT) moved in the opposite direction, falling approximately 3% after the market closed, even though its first fiscal quarter EPS of $4.13 and revenue of $77.7 billion beat forecasts. Investors were concerned about the slower pace of Azure’s growth and a previous outage in its cloud service.
Nvidia ($NVDA) climbed 2.9% during regular trading and briefly surpassed the $5 trillion market capitalization mark, driven by news that it had already logged $500 billion in AI chip orders.
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Market Sentiment and Drivers
The market tone was one of cautious optimism: Alphabet’s strong performance across all segments — led by a 34% growth in cloud — reinforced the narrative that AI investments are already paying off.
The downside came from Microsoft, where a long-standing DNS issue in Azure and discussions around cloud growth moderation reminded investors that execution risks remain due to the Azure outage.
Robust spending plans were another major talking point — Alphabet raised its capital expenditure forecast for 2025 to as much as $93 billion, while Meta ($META) signaled substantially higher spending in its 2026 expense outlook.
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Sector Highlights
Best Performer: Alphabet ($GOOGL) +5% after-hours, boosted by strong performance in Cloud, Search, and YouTube.
Close Competitor: Nvidia ($NVDA) +2.9% during the trading session, driven by record demand for AI chips and new geopolitical developments.
Worst Performer: Microsoft ($MSFT) –3% after-hours, as investors digested the slower Azure growth and the day’s cloud outage despite positive results.
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What to Watch
Apple ($AAPL) will be the highlight next week with its fourth fiscal quarter results; iPhone demand and commentary on gross margin will be key.
Chipmakers AMD ($AMD) and Qualcomm will also report their financial results during the same week, offering more clues about AI PC and data center spending.
Oracle ($ORCL) and IBM ($IBM) are hosting investor events later this month, which may provide updates on their cloud and AI strategies.
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