U.S. stock index futures advanced on Friday as megacap growth shares rebounded on the back of robust quarterly results from Alphabet and Microsoft, while investors awaited a key inflation print that could help shape U.S. monetary policy.
Market Snapshot
At 7:50 a.m. ET, Dow e-minis were up 33 points, or 0.09%, S&P 500 e-minis were up 36.25 points, or 0.71%, and Nasdaq 100 e-minis were up 172.5 points, or 0.98%.
Pre-Market Movers
Alphabet (GOOGL) - Alphabet posted better-than-expected first-quarter earnings and revenue and the parent company of Google announced it would be paying its first dividend of 20 cents a share. Alphabet also said its board board authorized the repurchase of up to $70 billion in stock. Alphabet shares were rising 12% in premarket trading, positioning the company for a valuation of more than $2 billion. Alphabet would be the fourth U.S. company to reach the $2 trillion market cap milestone, joining Apple, Nvidia, and Microsoft.
Microsoft (MSFT) - Speaking of Microsoft, the software giant reported fiscal third-quarter earnings of $2.94 a share, beating analysts’ expectations of $2.82, while revenue rose to $61.9 billion from $52.9 billion and topped consensus of $60.9 billion. Revenue from Azure and other cloud services jumped 31%, higher than estimates that called for growth of 28.8%. The growth included seven percentage points of growth related to artificial intelligence, up from six percentage points the previous quarter. Microsoft shares were up 4.4%.
Intel (INTC) - Intel was falling 7.9% after the chip maker posted first-quarter revenue of $12.7 billion, below analysts’ estimates of $12.8 billion, and issued a second-quarter earnings and revenue forecast that missed expectations. Intel said it expects second-quarter adjusted earnings of 10 cents a share, below forecasts of 26 cents, while revenue was projected of $12.5 billion to $13.5 billion, below estimates of $13.7 billion. Chief Executive Pat Gelsinger said Intel was “making steady progress against our priorities.”
Snap (SNAP) - Snap surged 26.1% after the social-media platform posted better-than-estimated first-quarter earnings and revenue and issued a forecast for second-quarter sales that was better than expected. The parent company of video-messaging app Snapchat sees sales in the second quarter of between $1.23 billion to $1.26 billion, higher than Wall Street expectations of $1.22 billion. Snap expects daily active users of 431 million in the second quarter, more than forecasts of 430.5 million.
Meta (META) - Meta Platforms was rising 1.4% in premarket trading after closing down by 11% on Thursday following a disappointing outlook from the parent of Facebook and Instagram. The stock’s close at $441.38 was its lowest since Feb. 1, and the percentage decrease was the largest since Oct. 27, 2022, when it fell 24.6%, according to Dow Jones Market Data.
Roku (ROKU) - Roku, the video-streaming company, said revenue in the first quarter rose 19% to $881.5 million, beating Wall Street forecasts of $843.5 million, as streaming households rose 14% from a year earlier and streaming hours jumped 23%. Roku posted a loss in the period of 35 cents a share, narrower than Wall Street expectations that called for a loss of 61 cents. The stock declined 3.6%.
Atlassian (TEAM) - Atlassian, the productivity software company, reported fiscal third-quarter earnings that beat analysts’ estimates and said co-founder Scott Farquhar would step down as a head of the company after 23 years. The stock was falling 6.4%.
Skechers (SKX) - Skechers was rising 11% as the athletic footwear company reported first-quarter earnings and sales that topped analysts’ estimates and raised its outlook for the year.
Exxon Mobil (XOM) - Exxon Mobil’s first-quarter adjusted earnings of $2.06 a share missed analysts’ estimates of $2.19 and the stock was falling 1.3% in premarket trading.
Chevron (CVX) - Chevron reported first-quarter adjusted earnings of $2.93 a share, 1 cent higher than analysts’ estimates, while revenue of $48.72 billion beat consensus of $48.42 billion. Chevron earned $3.55 a share a year earlier on revenue of $50.8 billion. The stock fell 0.5%.
U.S. Silica (SLCA) - U.S. Silica Holdings has agreed to be taken private by Apollo Global Management in a deal that gives the industrial minerals company an enterprise value of roughly $1.85 billion. U.S. Silica shares jumped 19% in premarket trading.
Market News
Alphabet Beats Revenue Estimates as AI Fuels Cloud Growth
Alphabet Inc. reported first-quarter revenue that exceeded analysts’ expectations, buoyed by growth in its cloud computing unit.
The Google parent generated sales, excluding partner payouts, of $67.6 billion for the three months that ended on March 31, surpassing the $66.1 billion expected on average by analysts, according to data compiled by Bloomberg. Net income was $1.89 per share, compared with Wall Street’s estimate of $1.53 per share.
The company also said it would pay a dividend of 20 cents a share, its first ever, and repurchase an additional $70 billion in stock.
Microsoft Sales, Profit Beat Expectations on AI Demand
Microsoft Corp.’s quarterly sales and profit climbed more than projected, lifted by corporate demand for the software maker’s cloud and artificial intelligence offerings.
Revenue in the third quarter, which ended March 31, rose 17% to $61.9 billion, while profit was $2.94 a share, the company said in a statement Thursday. Analysts on average estimated per-share earnings of $2.83 on sales of $60.9 billion.
Azure revenue gained 31% in the quarter, above an average prediction of 29% and picking up slightly from the 30% growth in the previous period. About 7% of that increase was attributable to AI, compared with 6% in the prior quarter.
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