Premarket movers: Microsoft rises; Alphabet drags software stocks lower
Microsoft (MSFT) shares rose 2.8% premarket after reporting strong Q1 results, with earnings of $4.89 per share and revenue of $92.28 billion, driven by 48% Azure revenue growth. Alphabet (GOOGL) shares dropped over 10% after missing earnings expectations, with EPS at $2.12 vs. $3.02 consensus. Software stocks fell, with Fortinet (FTNT) down 25% and ServiceNow (NOW) down 18.1% after disappointing results. Marvell (MRVL) fell 9.5% amid acquisition talks for Lumentum (LITE).
How this was made
The 30-second read
Why it matters
Earnings releases dominate early market direction, with cloud strength supporting Microsoft and ad slowdown pressuring Alphabet and related software firms.
Market read
The article provides fresh earnings data that directly moves multiple high‑cap tech stocks, offering immediate trading opportunities.
What to watch
ServiceNow's guidance dip may reflect broader enterprise budgeting constraints, not just AI disruption.
Background
Premarket trading shows a split in U.S. tech stocks as Microsoft beats expectations while Alphabet misses, triggering sector‑wide moves.
Ticker impact
Microsoft reported FY Q1 earnings beating estimates, driving a 2.8% pre‑market rise.
likely upward pressure as investors price in stronger cloud demand
EPS $4.89 vs $4.72 est; Azure revenue up 48% YoY.
Alphabet posted Q3 earnings below expectations, causing a >10% pre‑market drop.
likely continued downside as ad revenue growth slows
EPS $2.12 vs $3.02 est; ad growth slowest in five quarters.
ServiceNow missed EPS and gave weaker Q4 revenue guidance, sending the stock down 18.1% pre‑market.
likely further decline until guidance improves
Q4 revenue $4.25‑$4.26B vs $4.36B expected.
Fortinet plunged ~25% in pre‑market trading after its earnings miss heightened AI‑disruption concerns.
likely pressure as investors reassess AI impact on security spend
Stock reaction driven by broader software sector worries.
Salesforce fell 4.3% pre‑market as software stocks tumbled on AI‑related earnings disappointments.
likely modest downside pending broader sector recovery
Move linked to sector sentiment rather than company‑specific news.
Palo Alto Networks dropped 6% pre‑market amid software sector concerns over AI disruption.
likely continued weakness in short term
No company‑specific catalyst beyond sector sentiment.
CrowdStrike lost 5% pre‑market as AI‑related worries hit software names.
likely further decline until sector stabilizes
Move reflects broader software concerns.
Zscaler fell 5.8% pre‑market amid AI disruption concerns for software firms.
likely pressure persists short‑term
No distinct company news beyond sector trend.
Market effects
AI‑related earnings pressure spreads across software and cybersecurity stocks, potentially widening sector rotation.
U.S. tech indices face volatility in early trading, influencing Nasdaq futures.
Strong cloud earnings from Microsoft may support global tech sentiment, while Alphabet's ad slowdown could dampen worldwide ad‑spend outlook.
Counterpoint
Despite Alphabet's miss, its AI investments could yield long‑term growth; short‑term sell‑off may be overdone.
Key entities
- CompanyMicrosoft
Cloud and AI leader reporting earnings beat
- CompanyAlphabet
Google parent missing ad revenue expectations
- CompanyServiceNow
Enterprise software firm missing EPS and guidance
