Q2 STOCKS TO BUY

Why Facebook is Rallying After Earnings While Microsoft Wobbles

Facebook kicked off today's FAANG earnings wave

Feb 1, 2018 at 10:39 AM
    facebook X logo linkedin


    Facebook Inc (NASDAQ:FB) and Microsoft Corporation (NASDAQ:MSFT) are both in focus today, as traders eye the latest quarterly earnings results from the two tech heavyweights. While FB is firmly higher despite a massive drop in time spent on the app, Dow component MSFT is churning around breakeven in the wake of its earnings beat.

    FB stock is up 3.7% to trade at $193.88, a new all-time high. In after-hours action last night, investors were initially rattled by news that time spent on FB fell by roughly 50 million hours per day -- but a 43% increase in the average price per ad and corresponding 48% year-over-year revenue jump has effectively soothed jitters. 

    Analysts have rushed to raise their FB price targets today, with 13 brokerage firms lifting their estimates. BofA-Merrill Lynch issued the loftiest new target of $265, while Pivotal Research handed out a rather begrudging boost to $152 -- about 27% south of FB's fresh intraday high.

    Today's wave of upbeat notes continues a trend of bullish analyst attention for FB. The security has racked up 25 "buy" or better ratings, compared to one "hold" and zero "sells." With the outperforming social media stock up 46% year-over-year, this optimistic configuration seems appropriate -- if slightly top-heavy, nonetheless.

    As for MSFT, the stock's earnings reaction today has been muted, with the equity bouncing between fractional gains and losses so far this morning. Similar to FB, the blue-chip software stock landed a robust nine price-target hikes after exceeding analysts' earnings and revenue estimates in its fiscal second-quarter report.

    But there were signs that optimism on Microsoft had become overdone ahead of last night's earnings results. For example, call buying has dominated over put buying in recent weeks on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with MSFT sporting a 10-day call/put volume ratio of 3.90 -- in the 95th annual percentile. 

    Additionally, MSFT's 14-day Relative Strength Index (RSI) was docked at an overbought 75 as of yesterday's close, with the shares ending the session about 5% above their 20-day moving average. Essentially, it looks like Microsoft's earnings beat wasn't quite impressive enough to spur additional buying among the already-bullish crowd on Wall Street. At last look, MSFT was up just 0.4% at $95.43.

     
     

    “Buy This Stock Now!” - Expert Who Called 11x On TSLA

    He called a rare 11x on Tesla…

    But now, thanks to Elon & Trump’s new alliance…

    He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

    It’s trading for less than $5 per share right now…

    But it won’t be under the radar for long.

    Discover The 1,000x Bigger Elon Opportunity Here

    GRAND SLAM COUNTDOWN

     
     

    Featured Articles from Trusted Partners:

    👀Learn How Dividends Create Passive Income for Life
    Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

    💵New Income System Could Pay You $4,243 Monthly
    You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

    🚀Easy 92% Crypto Dividends (No Coins Required)
    COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

    🤝Free Advisor Match with Wiseradvisor.com
    Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

    ⚠️Dennis Quaid's #1 Warning for Americans
    Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

     

     
     

    Follow us on X, Follow us on Twitter