Kelly Evans asked me to come on and break down the biggest names in tech announcing earnings after the bell. It's a bit of a continuation of our chat a few weeks ago when I was in studio.
MSFT is straightforward. Hype around AI and Copilot aside, most of the revenues come from Cloud services with a fat 70% margin. That is the driver.
GOOGL has a similar issue that ads are how the firm makes it's money. I love YouTube, but it's only 10% of the business. Some analysts are talking up their own third tier cloud service, but it just started to turn a profit.
V - Visa is all about the macro environment. Sure, they are a great firm that prints money, but if we get a slowdown with the consumer and the actually spend less, investors may question why a firm that is growing at 10% a year is worth 30 times earnings. I would rather buy great companies at a good price.
Time will tell. You can also just buy a low cost tax efficient index fund as and get exposure to these mega cap names. But I love to look at these firms because they tell us about the broader economy. Sometimes, stocks are worth more as macro indicators than specific investments.