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Microsoft shares shed after-hours gains, turn negative

Microsoft shares slid about 1% in after-hours trading, reversing earlier gains.

Shares were initially higher after the company posted quarterly earnings per share that beat the Street’s expectations. However, investors’ sentiment soured after Microsoft issued disappointing guidance for revenue in the current quarter on its earnings conference call.

The company forecasted $50.5 billion to $51.5 billion in fiscal third quarter revenue, while analysts surveyed by Refinitiv anticipated $52.43 billion.

more about Microsoft’s results here.

Darla Mercado, Jordan Novet

Morgan Stanley’s Mike Wilson expects earnings will start to roll over on weaker consumer

Morgan Stanley’s Mike Wilson said investors should brace for tougher times ahead.

“The numbers are actually going to finally come down in a way that we didn’t think would happen in Q4, which it didn’t, but now, we think that’s happening,” Wilson said Tuesday on CNBC’s “Closing Bell: Overtime.”

The investment strategist said he expects earnings will start to roll over as companies deal with a weakening consumer.

Still, he’s open to changing his outlook if he does not see a “more meaningful” drawdown in the next three or four months, or by April.

“We will probably back off our call, … because we’re still in a world of somewhat of financial repression, and bonds are not a great alternative necessarily longer term, and stocks are kind of the only game in town in a higher inflationary environment,” he said. “We’re not willing to make that call today because we think the risk reward is out of whack.”

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— Sarah Min

Microsoft shares rise after earnings results show resilience in cloud

Shares of Microsoft led the gains in after-hours trading, up more than 4% after its quarterly results came in above estimates on top and bottom lines. The stronger-than-expected report was driven by the strong growth in its cloud unit.

Revenue in Microsoft’s Intelligent Cloud segment amounted to $21.51 billion, up 18%. Meanwhile, sales from Azure and other cloud services, which Microsoft does not report in dollars, grew by 31%.

— Yun Li