Alphabet & Microsoft Earn High Profits, Why Shares On Wall Street Can Fall?

<p>&nbsp;Based on indications from Wall Street, both Alphabet and Microsoft reported earnings that exceeded estimates. However, their shares fell in today's trading session.</p><p><br /></p><p>From an investor's point of view, stock movements are set according to the limits of perfection. Alphabet shares are up 56% this year and hit a recent high last week. It surpassed the previous record at the end of 2021 at the time of technological progress.</p><p><br /></p><p>Microsoft, on the other hand, is up 70% in 12 months to a recent high and has overtaken Apple as the most valuable public company.</p><p><br /></p><p>These two companies began to gain a surge in the market after implementing the use of artificial intelligence (AI) and received positive support from their shareholders due to cost-saving efforts and drastic elimination of thousands of jobs.</p><p><br /></p><p>Ahead of their earnings report week, investors who bought shares of both groups had high hopes. However, many of them were disappointed after the movement on Wall Street showed a fall.</p><p><br /></p><p><br /></p><p>On Tuesday, Alphabet reported 13% revenue growth, the fastest since the start of 2022. Sales of $86.31 billion beat the average estimate of $85.33 billion. Profit per share was $1.64 above the estimate of 5 cents.</p><p><br /></p><p>Microsoft's revenue rose by 18% to $62.02 billion, exceeding the average estimate of $61.12 billion. Earnings per share were $2.93 above consensus by 15 cents.</p><p><br /></p><p>Both companies also exceeded expectations in their businesses with Google Cloud reporting 25% growth and Microsoft's Azure and other larger cloud services growing 30%.</p><p><br /></p><p>However, Alphabet is having trouble advertising on Google. According to Stifel's analysis, Alphabet produces healthy but still insufficient advertising.</p><p><br /></p><p>Brian Wieser, an analyst at Madison and Wall noted that the market has unrealistic expectations of Google based on its size and dominance.</p>