MSFT, FB Shine: 5 Other Tech Stocks To Buy Before Earnings

Bellwether earnings continued to impress on Apr 23 with Microsoft (MSFT - Free Report) and Facebook (FB - Free Report) releasing better-than-expected results. Microsoft beat on both revenues and earnings with the stock moving toward a valuation of $1 trillion.

Meanwhile, Facebook’s earnings suffered from a Federal Trade Commission (FTC) penalty but impressed on other counts. While an earnings deceleration for the sector is expected during the first quarter, things are not as bad as earlier feared.

Further, the Technology Select Sector SPDR (XLK) remains the S&P 500’s best performer in the year-to-date period. Tech stocks are now helping U.S. equity markets reach new highs on a regular basis. This is why it is a good idea to pick stocks from the sector that are likely to outperform their earnings estimates.

Microsoft Impresses, Facebook Defies Headwinds

In the first quarter, Microsoft reported earnings per share of $1.14, surpassing the Zacks Consensus Estimate of $1.00. Revenues of $30.6 billion also exceeded the Zacks Consensus Estimate of $29.8 billion. Strong demand boosted revenues for its cloud-based services to $9.7 billion, marking a yearly jump of more than 40%. Azure garnered revenues of $7.3 billion.

Facebook’s first-quarter earnings of 85 cents per share missed the Zacks Consensus Estimate of $1.66. This was largely due to the fact that the social media giant had to spend $3 billion in quarterly profits on legal expenses arising out of an FTC investigation. However, revenues of $15.1 billion outpaced the Zacks Consensus Estimate of $15 billion.

And surprisingly, investors remained unfazed by all the headwinds hitting Facebook recently. So much so that shares rose more than 7% in after-hours trading on Apr 23. Daily active users came in at 1.56 billion, beating most expectations and rising 8% year over year. Monthly active users increased to 2.38 billion, also outpacing estimates.

Tech Stocks Remain Year’s Best Performers

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