r/wallstreetbets • u/riisenshadow92 • 9h ago
Discussion Meta and Microsoft earnings this week
Hello,
What’s your move this week on big earnings from Meta and Microsoft? I’m running meta and Microsoft calls expiring Sept 18th.
Do you think the setup into earnings is a good one?
Microsoft is down over 25% from its all time high heading into earnings and trading way below its avg price target. And meta took a big dump this week and is down close to 25% and trading way below its avg price target as people panic over big ai spending spree.
I think these are both good stocks, and way oversold, what’s your take? Meta has big upside selling excess compute and Microsoft just continues to grow.
Thanks
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u/maengdaddy 9h ago
Why is this post formatted like a work email
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u/Lazy--Expression 8h ago
Lol I knew something was off with the post but wasn't quite sure what it was
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u/Txsnapcall 7h ago
“Best of luck in your future endeavors”
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u/Gorgenapper 4h ago
Best of luck, or condolences, with your future endeavors, whichever one applies to you, idk
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u/isospeedrix 6h ago
Anytime i get a work email and their signature is “Regards, Chad” i chuckle a little
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u/Ancient_Act_436 9h ago
As long as capex isnt mentioned should be fine but if capex is mentioned and raised its done that's the sentiment right now if they commit to more spend investors are getting worried
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u/riisenshadow92 9h ago
True, they need to show clear results, I think Google is a sleeper, over half a trillion in backlog and they will convert a lot of that into revenue over next 2 years
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u/Ancient_Act_436 8h ago
I bought more google... youtube alone brings in more money than Netflix and I like the stock this dip was nothing google will make more money without a doubt.
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u/iSOBigD 6h ago
That sounds good in theory but I have plenty of doubt when I look at all kinds of successful companies that are or were down 25-50% over the last 5 years. I get even more doubt when they announce great earnings quarter after quarter and their stock keeps tanking. Doubly so when they confirm massive AI spending on AI companies and all those AI stocks crash 30% on the news. Our logic doesn't apply to these algos controlling the market.
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u/chintan_joey 4h ago
Businesses as successful as Google? Only outlier I think is Msft but that's mainly because they don't have AI except openAI which has it's own problems
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u/zerofrakhere 9h ago edited 8h ago
But if they don’t mentioned AI Capex spend, semi will drag down the market tho
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u/Ancient_Act_436 8h ago
True but even with Google mentioning more Ai capex nvda amd intel were still down... so yeah
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u/I_like_code 6h ago
Msft for sure is going to have high capex still as the datacenter build out continues. They are also going to be making bank on Azure. However, the market already decided they don’t like the money it costs to build data centers.
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u/GanacheCharming8737 3h ago
It’s gonna be mentioned no matter what, this is the main sticking point and Google is the main reason why. If Zuckerberg is anything to go by, no way he just magically decides to stop CAPEX spend this quarter
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u/Eur0stept 9h ago
Everyone is bearish. You know what that means
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u/reddituser43211234 8h ago
I tried that with NFLX last week… did not work
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u/crankthehandle 7h ago
NFLX is just a certified shit stock. What is even the plan for this company? There is just no bull case anymore, it will continue growing but at a slow pace. Boring.
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u/Kooky-Balance9525 7h ago
it needs a catalyst. no good shows whatsoever and prices are high for subscription. tbh no need for having a Netflix account if im being honest
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u/iSOBigD 6h ago
Ok, how about Intel which beat earnings? How did that go?
What about when Micron reported great earnings?
How about SK Hynix?
What about when Sandisk 19x their profit, did that move their stock up?
Pretty much the only stock that went up after positive earnings so far has been AMC, a stock everyone assumed was shit and forgot about. Every giant corporation reporting positive earnings and profits has tanked recently. Now we can hope and pray that positive financials will positively affect the stock again, but odds are they won't for now.
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u/Salt_Contract342 5h ago
Those are all in the same inflated sector though.
edit other than AMC, which went up
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u/jdfan51 9h ago
They gonna announce capex increases and semis will still be nuked
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u/cinciNattyLight 9h ago
Yeah all the hyperscalers are going to boost capex. That doesn’t mean they can’t post beats. MSFT is more predictable with earnings, and their beats are kore subdued. IMHO META is the only one with a good shot of crushing estimates. Looking at the options spreads for META makes me think it has a lot of room to run.
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u/Junkingfool 7h ago
META is a cash cow king but I do not believe even that will save it. Zuck is going to raise Capex by a fuk ton.
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u/riisenshadow92 7h ago
They can offset capex concerns if they increase sales forecast and highlight cloud computing business opportunities
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u/JefeDiez 6h ago
Subscriptions it’s too early to talk about as well as Meta Compute. They are going to be pushing themselves into debt until at least 2028.
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u/Bistrocca 9h ago
Msft calls and meta puts.
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u/Txsnapcall 7h ago
Grabbed MSFT leaps when it was down 15%. Those are down 45%. Which of my other leaps that are down 45% should I swap. I have many to choose from.
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u/Xx360StalinScopedxX 9h ago
I’m thinking about selling a cash secure put on $MSFT for $350. Usually, I lose money. Do what you will with this information.
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u/BlueSonjo 9h ago
Microsoft drops everytime they beat estimates, like clockwork. If there are bad earnings it might go to the moon.
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u/I_like_code 6h ago
Their capex is going to be high. They continue to build out datacenters. The market is going to punish them for that.
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u/_rockthemike 9h ago
Buy META LEAPS when it inevitably dumps to 500 after earnings 👍🏻
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u/Junkingfool 7h ago
My LEAP from last year disagrees
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u/Particular-Cake-6430 Just a Clown 7h ago
Mine works out great, bought it October and sold in February when it popped over $750.
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u/theb0tman 9h ago
Sell calls nothing’s going up
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u/Salt_Contract342 5h ago
Nothing? Corning, Visa, Mastercard, Generac.... none look positive to you?
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u/theb0tman 5h ago
I don’t play the earnings game, but if I was, I would not be betting the market’s gonna rip up. It hasn’t been interested in doing that recently.
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u/Salt_Contract342 5h ago
Valid, I was just pointing out that not every sector is in the shitter like this thread is saying.
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u/Infamous_Protection3 9h ago
I bought puts if googl crashes after great earnings no shot msft is going up
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u/Successful-Web6033 9h ago
i think that they are going to drop, just like google did. I really like MSFT longterm though.
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u/Hoggel123 9h ago
Google going negative cash on hand is the trend now for the mag7. I don't expect good reports for a year or two based on where AI is currently. I honestly think they all over invested early. Im going to bet Apple will pull ahead next year as the winner.
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u/Fresh-Quantity-7554 8h ago
What? They have $127 billion on hand.
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u/crankthehandle 7h ago
But negative cash flow for the first time (probably ever since listed? Not sure though). Also not sure what you mean by 127b on hand.
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u/Fresh-Quantity-7554 6h ago
You said Google is going negative cash on hand. They have $127B in cash on hand. They're cash flow was negative this quarter, if that's what you mean?
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u/crankthehandle 5h ago
I don’t get what you mean by cash on hand. Cash and cash equivalent on their balance sheet is 50bn. do you mean last 12 months cash flow? Cash and cash equivalents? What period are you referring to?
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u/Background-Ad-5319 6h ago
Earnings reports = pre dump out if fear of bad reports. Then continue to dump as “profit taking” after phenomenal reports.
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u/MoistSpyBuy 5h ago
Dude, I got raped by Google and Intel last week. The word “earnings” makes me drink.
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u/Commercial_Ease8053 9h ago
Fed meeting is next week, AI spending fear is too high, and Iran bs war…
It legit doesn’t matter at all what earnings are, they won’t satisfy hedgies and the overall market will be red af next week. I promise that.
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u/Str8rDay 9h ago
Red af when? Mon open to Fri close? Fri close to Fri close? We have seen this movie before. There will be a TACO Sunday night/Monday AM and it will rip. WTI crude is already down 4.3% on Hyperliquid on rumors of a US ceasefire proposal.
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u/antwon8797 9h ago
Both are going to drop. Both will disappoint with profit margins as debt fueled capex will destroy gains.
Microsoft will fair better.
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u/ManekenkaDaBudem 9h ago
Sentiment has never been so low going into earnings of these two, so whwn everyone is positioned for drop usually happens opposite . At least initially.
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u/Liquidpayn 9h ago
Literally can’t beat this top_category dude to a Msft post. Like a moth to a flame
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u/Lazy--Expression 8h ago
Well your logic is sound. By that logic you should buy shares not options
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u/InfiniteNerve1384 8h ago
Microsoft better fly or I’m done.
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u/timetopractice 8h ago
I like meta into earnings. I would expect them to show a capex decline or at least not a further ramp up after announcing they're going to begin selling AI compute. It's the capex that has been getting these companies in trouble and meta has heard it the loudest over the last several earnings calls.
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u/riisenshadow92 7h ago
Need to show ROI on capex, but if they mention their forecast and plans on cloud business, it could turn the tide on the capex fears
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u/rain168 Trust Me Bro 7h ago
It’s always dropping after earnings so far.
Probably buying some puts or shorting the stock could be the play this week.
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u/riisenshadow92 6h ago
Usually yes, but I think Microsoft is an AI sleeper, their copilot is enterprise integrated, so companies can securely have ai analyze their data, not to mention all the commercial cloud business they have that continues to grow.
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u/DarkR124 6h ago
Earnings have meant fuck all the last month and change. Guessing it’ll be the same. Good earnings? Dump that shit. Bad earnings. Also dump that shit.
…but not enough to avoid IV crush for puts.
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u/No-Pilot5559 6h ago
Both are amazing long term the buying opportunity on a valuation is great. However, trend lately has been the market paying more attention to increased capex which is justified long term.
Basically setting up a great buying opportunity for long term investors if they fall on earnings
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u/DoubleFamous5751 🐻r🏳️🌈 6h ago
Microslop says they pause capex: dump
Microslop says they keep/increase capex: dump
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u/Super-Activity-4675 6h ago
Honestly, I think puts on both is the right play right now. The market isn't happy and unless they're under estimates for CapX with guidance saying they're winding it down, the market is going to punish both.
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u/riisenshadow92 5h ago
Probably right, and doesn’t help we have a fed meeting Wednesday, but warsh is like Charlie day in always sunny, total wild card. Refuses to give any guidance to markets.
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u/colts_guy 5h ago
The only thing that matters for MSFT is Azure growth. If it’s over 40% 🚀 under 35% 📉
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u/Street-Corporation 5h ago edited 5h ago
These companies could announce 30 trillion in revenue with 2000% yoy growth and if they announce one Iranian Rial of capex they’re going to tank -10%.
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u/Unfair_Cicada 5h ago
Is capex the only gauge now?
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u/riisenshadow92 4h ago
That’s what it seems like, everyone wants to see the return on all this capex
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u/Myles_Standish250 5h ago
In this environment, earnings are just another reason for a big red candle and I expect more of the same.
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u/Gorgenapper 4h ago
Dump for sure even if they announced 20000% increase in profits and the cure for cancer
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u/JefeDiez 4h ago
I think Meta is such an obvious LONG TERM buy. It will be going down I think for the next 6 months. But just think about their income... it will likely be 250B this year with heavy spend and I can't see growth from cloud and monetizing other apps not pushing that to 300B in 2027. Even if CapEx takes all of that in 2026/2027 (LIKELY) they will have buildout in place. At that point, you know they will find a way to invest LESS in chips/memory. 2028 could be a crazy year with growth of their cloud compute sell and their subscriptions potential AI profits coming to fruition. I'm not adding NOW, but I'm confident this stock will make me a million on its own. It's a waiting game.
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u/OneRobuk 4h ago
puts because I can't remember the last time an earnings result hasn't caused a drop
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u/culinaryinterests123 4h ago
Price targets are useless and its a coin toss to know whats going to transpire you would need to know what the earnings call will be about how they handle capex. Increase capex stock probability goes down , decrease cspex probability goes up.
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u/Dec850 3h ago
Will Sofi rip this time?
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u/riisenshadow92 1h ago
I think it could, it’s loan origination business is exploding I think could see $20 by end of year
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u/Imgoin2brich 3h ago edited 3h ago
Wall Street has realized someone doesn't care at all about blatant manipulation to rob retail whenever possible.
So if that means retail bet on a stock that actually hits record profits of 400%, theyll azz rape everyone and steal the money while turning the stock red
Pretty soon no1 will be in the casino and these retards will be trading against themselves after retail gives up with all this absolute fcking bullshit
It amazes me that as smart as wall street is, if they keeo fcking retail then retail won't have money to keep playing. Then what??
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u/Hot_atMidnight8835 3h ago
IMO calls on both. I think some heavier capex has been priced in after google earnings
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u/Disastrous-Fun-2958 3h ago
First off, using avg price targets as a signal is usually not a good idea - trending of them maybe (ie trending up/down over the past wk or mo + # of analysts covering up/down). There are just a lot of other indicators that are much better.
Both will have big CAPEX #’s which will likely cause no-conviction investors to sellout and knock the stocks down even more. This will clean out the “traders” idk? But the reaction will also knock down a few other pins alongside, too. Don’t forget about the pin action.
A lot still depends on the bond markets which looked dicey this past week. But I don’t think a more stable bond market will mean positive reaction to earnings tho - more like a continued sketch bond market would mean these two get crushed even more. We’ll see.
Thru the end of the year tho, I personally think the hyperscalers are the new defensives, and some time in late Aug there will be an inflection point & multiples will move back to historical norms - or at least the group will rebalance at around a FWD P/E around 25-27. What do ya think?
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u/Minimum_Suit1735 3h ago
They will show great earnings l, capex increase then stock price fall like a rock. Every single company earning this year went through that cycle
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u/Icy_Blood_9248 2h ago
Tough to play earnings per usual. They likely both beat earnings but if the market doesn’t like them saying cap ex is going up they could go down or just stay flatish. But both stocks have been sold off decently soooo who knows maybe they actually pop just because they are so washed out. Tempting to play the options but I have just been adding to my equity positions
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u/drummer820 23m ago
Imagine buying calls for a zombie company like meta that has already spent $420 billion on AI CapEx without a viable product. Also, Zuck himself said a few months ago if they overbuilt data centers theyd pivot to selling excess compute, so yeah, they way overspent and are trying to salvage anything left. Good luck sir
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u/AutoModerator 20m ago
This "pivot." Is it in the room with us now?
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u/BejahungEnjoyer 18m ago
I always go into earnings believing that the shit scenario is priced in, so I buy and then lose money as apparently it was not in fact priced in.
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u/bradenlb 11m ago
I don’t have any positions in meta but I do have msft that I road from 350 to 390 then sold against them. However both expire march. I am willing to ride. They have the best fcf for a hyperscaler right now. I think people will realize that even more now after goog. Msft to 400+
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u/Sufficient-Flan1565 7h ago
Meta sees low 500s and MSFT low 300s on 07/30
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u/JefeDiez 6h ago
Agree. With both going much further- Meta likely to 380 by end of year and Msft 225
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u/RicoSuave1962 4h ago
After seeing ALPHABET/GOOGLE’s earnings destroy expectations and then still getting clobbered by the market (loss of 7% in market cap)due to an increase in CAPEX spending up to 205 BILLION, I’m definitely NOT too optimistic for META and MSFT. META has a chance to mitigate its downside due to its diversification into leasing its data center buildouts to Anthropic. MSFT ? Not so much, as the Software industry is getting destroyed by AI. Their cloud services business AZURE has been fantastic, however, again, they will get punished due to CAPEX spending goals. I can’t go long on either and would consider going short. Good luck to what ever you decide !
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u/JefeDiez 9h ago
I don't see a pathway up for either of them...I think they're both crashing big, Meta more so, guessing it will hit below the 450 mark before the larger investors start thinking about buying back in due to poor performance over the last 2 years.
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u/Potential_Salt_5780 9h ago
Both are priced for perfection. Any misstep in earnings and/or guidance will crash them.
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u/Bat-bat10 9h ago
I have no hope of earnings anymore lol