Big Tech crushes earnings estimates: How have their shares reacted?

Three big tech companies – Apple Inc (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc (NASDAQ:GOOG) – with a combined worth of over US$5 trillion, announced their second quarter results on Tuesday.

All the three companies outperformed the market estimates. However, each tech giant’s share price reacted differently to the quarterly numbers. Let’s study why investors behaved differently to different stocks with similar business and similar trend:

Alphabet: The parent company of search engine – Google – surged 3.18% on Wednesday – a day after the results. The company saw its shares reach an all-time high as a surge in advertising spending helped it post record quarterly results. This led to the tech-heavy Nasdaq Composite to close in the red, although the Nasdaq's gains were capped by a forecast of slowing revenue growth from Apple Inc.

Apple: Apple reported strong third-quarter earnings on Tuesday, which made Wall Street expectations look miniscule. While everyone was discounting for a 12% increase in topline, the company saw its revenues surge 36%. But still, shares of the iconic iPhone and Macbook maker fell 1.22% on Wednesday. Reason? Even as Apple did not provide a formal guidance for the sixth quarter in a row, it warned its earnings in the September quarter would not be as strong as June’s. This along with a warning over chip issues dampened the mood of investors.

Microsoft: The company concluded yet another record-breaking year with more than US$60 billion in earnings and US$165 billion in revenue – somewhat justifying its place as the only second company to reach the US$2 trillion mark in the valuation. However, despite the stellar results, the shares of the company treaded near the flatline on Wednesday – down just 0.11%.