In the dynamic world of equities, there are always potential movers and shakers that grab the attention of the investment community. This week, two tech giants — Microsoft Corporation (MSFT) and Alphabet Inc. (GOOGL) — are particularly noteworthy. Let's delve deeper into the rationale behind this. For those looking to diversify their portfolios, trading giants like MSFT and GOOGL might be lucrative opportunities. Explore these and other top-tier stocks with the myriad advantages Exness offers. To keep your fingers on the market's pulse, leverage insights from the Exness blog and stay updated on-the-go with the Exness Trade app.
Microsoft Corporation's Financial Overview
One of the pioneers of the tech industry, Microsoft Corporation (MSFT), experienced a dip of approximately 6% in its stock price during the third quarter, wrapping up at $319.90 (USD) as of 30th September. The keenly awaited earnings report for the fiscal quarter culminating in September 2023 is on the horizon, slated to be unveiled post-market hours on Tuesday, 24th October. If analyst predictions hold true, the EPS might touch $2.65, marking a commendable surge from the $2.35 recorded during the analogous period the previous year.
Though Microsoft hasn't earned the tag of a 'dividend darling' over the years, maintaining a sub-1% dividend yield over the past four years, a glance at its financial health reveals its undeniable allure to both long-term investors and agile traders. The company's asset column comfortably eclipses its liabilities with a 2:1 ratio. The current ratio, hovering at an impressive 178%, underscores Microsoft's robust financial framework, positioning it well to navigate any transitory financial storms.
Technical Analysis Insights on MSFT
From a technical perspective, Microsoft's stock trajectory has displayed an upward correction trend since the outset of October, gaining traction from the lower spectrum of the Bollinger Bands. As of now, the stock price is tussling with the resistance posed by the 23.6% tier of the weekly Fibonacci retracement coupled with the challenge of the 100-day moving average. The Stochastic Oscillator, tilting towards the overbought extremes, drops subtle hints that the stock might witness a downward correction in the imminent sessions. Compounding this bearish inclination is the fact that the swifter moving average lags behind its slower counterpart.
However, this narrative could swiftly pivot if Microsoft announces robust earnings later this month. Such a development could catalyze a surge in bullish momentum, potentially propelling the stock towards fresh peaks or, at a minimum, nudging it closer to its recent zenith in the vicinity of the $340 mark.
Alphabet Inc.: A Closer Look
Alphabet Inc. (GOOGL), the parent company of Google, showcased impressive resilience in the equity market, marking an ascent of approximately 10% in its stock price during the third quarter. Investors and market enthusiasts are eagerly awaiting the company’s financial disclosures in its Q3 earnings report, slated for release on Tuesday, October 24. The prevailing consensus among analysts points to an Expected Per Share (EPS) value of $1.45, marking a significant upturn from the $1.06 reported during the same timeframe in the previous year.
Diving deeper into the company's financial architecture, one of the standout metrics is its reduced debt profile. Alphabet's debt levels have plummeted to their nadir since Q3 2020, constituting a mere 12% of its total financial obligations. This streamlined debt profile is further bolstered by the company's formidable current ratio, which as of June 30, 2023, stands at a commendable 217%. This ratio underscores Alphabet's robust capability to comfortably offset its short-term financial commitments using its existing assets. When analyzing the asset-to-liability dynamics, the 3:1 ratio offers an optimistic picture of the company's financial robustness. Furthermore, the company's net earnings surged by an impressive 15% YoY during Q2 2023. Such robust financial indicators elucidate why Alphabet remains a darling for both institutional and retail investors.
Technical Analysis Insights on GOOGL
Navigating the technical landscape, Alphabet's stock has been riding a consistent bullish wave for the better part of the quarter, registering steady increments in its stock valuation. Presently, the stock price not only hovers above pivotal technical indicators such as moving averages and Fibonacci retracements but is also geared up to retest its previous peak nestled in the $139-$140 range.
The 50-day moving average trading trajectory comfortably eclipses that of the 100-day moving average, further cementing the prevalent bullish undertone. However, the waters aren't entirely clear. The Stochastic Oscillator, venturing into the overbought territory, raises a flag of caution, hinting at potential corrective movements on the horizon before the stock resumes its bullish ascent.
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