Investing.com – With powerful earnings results and the US election approaching, there was a lot to talk about in the markets this week, with various large names making significant moves. Here are Investing.com’s stocks of the week:
Big Tech (Earnings): Microsoft (NASDAQ:) disappoints, Amazon (NASDAQ:) up
On Wednesday, Microsoft released its latest quarterly results. The tech giant saw record profits and revenues. However, the stock fell more than 6% in the following session as the company said it saw a slight slowdown in the next quarter given supply chain challenges such as delays in third-party infrastructure supporting artificial intelligence capabilities.
“While Azure growth in the September quarter was 1 point higher than expected, we believe investors will be moderately disappointed with Azure’s December quarter guidance, even though the supply-demand imbalance impacts the December quarter more than the quarter September,” said analysts from Kapitał BMO. “Given lower EPS estimates, primarily due to OpenAI’s impact, we are modestly lowering our price target to $495. We maintain our “Outperform” rating.
Meanwhile, Amazon shares rose 6.7% on Friday after reporting improved earnings and revenue, while improving retail sales boosted profits.
Following the report’s release, Citi analysts said they were “increasingly confident that the company can invest in growth while delivering significant margin expansion.”
“We highlight retail efficiency gains that lower Amazon’s costs of serving, resulting in faster delivery, increased conversion rates and increased share of wallet as lower ASP/essential products attract greater overall spend,” the bank added.
Apple (NASDAQ:) also reported earnings this week that topped expectations. However, the company’s shares fell on Friday as investors were disappointed with its guidance.
SMCI
It was another disastrous week for SMCI, which fell more than 32% on Wednesday following the sudden exit of Ernst & Young LLP (EY) as the company’s registered public accounting firm.
In a filing with the U.S. Securities and Exchange Commission (SEC), Super Micro revealed that EY resigned on October 24.
EY said it “will no longer be able to rely on the representations of management and the Audit Committee” and expressed reluctance to link itself to the financial statements.
SMCI shares are down more than 41% over the past week. As of this writing on Friday, the company’s stock is down more than 6%.
In response to this news, Rosenblatt suspended its recommendation for the stock, citing financial uncertainty. “Given the uncertainty surrounding the company’s financials, we are suspending our rating, price target and estimates for Super Micro until we obtain results that will determine our rating,” the company said.
Estée Lauder (NYSE:)
It was also not a good week for cosmetics company Estee Lauder, which fell 20% on Thursday and another 2% on Friday after the company reported a lack of revenue and withdrew its fiscal 2025 guidance amid ongoing challenges in China and retail trade in tourism products.
The company said it withdrew its fiscal 2025 guidance due to “increasing uncertainty around [the] moment of stabilization in the mainland China market and travel retail sales in Asia, as well as in the context of leadership changes.”
In addition, the company also announced a quarterly dividend cut, and its forecast for the second quarter was lower than expected.
Following the report, JPMorgan downgraded Estee Lauder to neutral and cut its share price target to $74 from $113. The bank said: “We do not expect any visibility for at least the next three months.
“Due to operational deleveraging resulting from lower-than-expected volumes in China and Asia Travel Retail, plan execution and earnings are likely to be delayed and we therefore believe it is prudent to advise investors to wait for better signs of improving demand.”
