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Technology giants Microsoft (Nasdaq: MSFT) and Alphabet (Nasdaq: GOOG) are set to release their earnings reports for the first quarter of 2024, with investors eagerly awaiting updates on their financial performance and strategic initiatives.

As two of the most influential companies in the tech sector, their results are expected to provide valuable insights into the industry’s trajectory and the impact of emerging technologies like artificial intelligence (AI).

Alphabet, Microsoft Set to Report Q1 Results

Alphabet, Google’s parent company, is expected to have focused on stabilizing its digital advertising business, which remains a primary revenue driver. The company’s ad revenues, which span YouTube, Search, and Network ads, are expected to benefit from strong market trends.

Additionally, developments on the firm’s AI service Gemini are anticipated to bolster its competitiveness in the AI space after a shaky launch and potentially positively impact ad revenues. Wall Street analysts forecast earnings of $1.51 per share on revenue of $78.57 billion for the quarter, indicating significant year-over-year growth.

On the other hand, Microsoft is projected to report earnings of $2.82 per share on revenue of $60.76 billion for the quarter that ended March, reflecting substantial growth compared to the previous year.

The company’s heavy investments in AI, including enhancements like Copilot, are expected to drive revenue growth, particularly in its cloud services division. Microsoft’s focus on long-term development and leveraging advances in AI and cloud technology positions the company to maintain its strong market position.

Both companies have implemented various cost-efficiency measures to boost profitability and expand margins. Alphabet, for instance, has reduced its headcount as part of its efforts to streamline operations and optimize resource allocation. These initiatives are expected to contribute positively to the companies’ bottom lines.

MSFT and GOOG Dip Before Earnings Release

In terms of stock performance, Microsoft shares have experienced significant appreciation, increasing approximately 15% since the start of the year, driven by strong performance and investor confidence in its strategic direction.

Alphabet’s stock has also seen an uptick, with an 11% increase year-to-date, supported by optimism around digital advertising and AI investments.

However, at the time of writing, Microsoft is trading down 3.8% at $393.53, while Alphabet is trading down 2.2% at $157.52, as the broader market trends downward following the release of GDP data indicating slower-than-expected growth in the US economy during the first quarter.

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