Two of the biggest companies in the world, Microsoft (NASDAQ:) and Meta (Facebook (NASDAQ:) parent), are both up over 5% in after-hours after reporting strong earnings results.
came in 7.8% above expectations, a 6-quarter high, while sales came in about $1.5 billion above estimates.
came in a whopping 23% above expectations, on sales that were about $1 billion higher than estimates.
Looking ahead, the street is expecting both companies to grow sales around 11% over the next 4 quarters (both below their recent averages). Where they differ is in earnings expectations.
Meta earnings estimates are for a decrease of 3% over the next 4 quarters, while estimates for Microsoft are for earnings to grow 9.3%.
Both companies’ forward PEs are around the 25x level after this afternoon’s gap higher. Both deserve a premium valuation in the market, but clearly, operating costs are a concern for META in the near term. And this is reflected in stock prices, as Microsoft trades above its liberation day level, while META still trades below.