Microsoft Beats Expectations, AMD Agrees $35bn Deal For Rival

Microsoft’s (MSFT) earnings report led headlines on Tuesday, as an expectation beating calendar Q3 (the firm’s fiscal Q1) played off against weaker than anticipated guidance for the current quarter (its fiscal Q2). Highlights included the firm’s cloud-computing business Azure, which increased revenues by 48% year-over-year. In the current quarter, the release of the firm’s new generation of Xbox consoles will be crucial, and the company doubled-down on gaming last month with the announcement that it is acquiring ZeniMax Media — which owns game developer Bethesda — for $7.5bn.

In other headlines, chipmaker AMD (AMD) finalized a previously-rumored deal to acquire rival Xilinx (XLNX) for $35bn, following rival Nvidia’s (NVDA) $40bn move for Arm Holdings. The firm is funding the deal entirely with stock, taking advantage of a 100% plus run-up in its share price over the past 12 months. Xilinx stock popped 8.6% after the news, leading the S&P 500.

Franklin Templeton falls 13.6% after earnings report

After Monday’s sell-off, two of the three major US stock indices continued to fall on Tuesday, with the Dow Jones Industrial Average down 0.8% and the S&P 500 off by 0.3%. The tech-heavy Nasdaq Composite jumped 0.6% helped higher by Xilinx, Amazon (AMZN), Facebook (FB) and others. In the S&P 500, the industrial and financial sectors were the worst performers, with asset manager Franklin Templeton (BEN) (listed as Franklin Resources) the biggest loser with a 13.6% loss. Franklin’s tumble followed its quarterly earnings report, in which it revealed net client redemptions as it works to integrate Legg Mason following the close of its mega-deal to acquire the firm.

In corporate news, luxury giant LVMH’s acquisition of US jeweler Tiffany (TIF) appears to have life in it yet. The deal, which was reached just before the pandemic, has run into trouble with the potential for a courtroom fight looming. Per the FT, LVMH (LVMHF) is in talks to renegotiate the terms of the deal with a revised price tag. Tiffany & Co stock jumped close to 5% after the news.

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