Trending tickers: Microsoft l Alphabet l LVMH l Unilever

Microsoft (MSFT)

Software and cloud-computing firm Microsoft releases its latest earnings results after US trading closes later on Tuesday and the focus will likely be on its developments within the artificIal intelligence (AI) sector.

Microsoft's reveal of its AI subscription pricing last week sent the stock to a new high.

"AI is already benefiting Azure [cloud computing platform run by Microsoft] results and this should only be the beginning given Microsoft's pole position in a decade-long industry evolution. Microsoft announced M365 copilot pricing of $30 per user/month, which reflects a 53-83% pricing uplift, far greater than the 15-30% previously thought," Jefferies tech analyst Brent Thill told Yahoo Finance.

Read more: LIVE: FTSE muted as UK faces highest debt burden in G7

The “copilot subscription service” adds AI to the company’s Office products including Word, Excel and Teams.

However, it will cost users an additional $30 per month to have the AI offerings, increasing monthly prices for enterprise customers by as much as 83%.

It comes as the company’s finance chief, Amy Hood, said recently that next generation AI will be the fastest growing $10bn (£7.86bn) business in history.

Alphabet (GOOGL)

Investors will also be keeping across the stock of Alphabet on Tuesday with Google’s parent company also revealing its latest quarterly results later.

Cloud growth and ad revenues will be closely watched, as well as its AI efforts.

Wall Street analysts are expecting the company to report revenue of $72.75bn and earnings per share of $1.32, according to data from Bloomberg. Meanwhile, operating income is expected to come in at $19.94bn.

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Overall, expectations for Alphabet will be fairly muted in this cycle, JPMorgan analyst Doug Anmuth said on 20 July in a note to investors.

"Sentiment is still somewhat muted, and AI will remain a controversial topic for investors, particularly whether GOOGL can drive incremental monetisation through generative AI search (we think yes)," he said.

"Accordingly, we believe the bar for GOOGL is lower than for other mega-cap techs. However, beyond revenue acceleration, 2H [second half] catalysts for GOOGL are less clear, and advances in the AI and cost improvement narratives could take multiple quarters to play out."

LVMH (MC.PA)

Shares in luxury goods company LVMH, whose brands include Tiffany & Co. and Christian Dior, rose nearly 1% on Tuesday morning ahead of reporting its latest financial results.

The 2023 first-half results of Europe’s most valuable company will be available after the close of the Paris market.

Deutsche Bank has said that demand in China will be a key theme in LVMH’s results as the company’s luxury goods are popular with consumers in the world’s second largest economy.

On 12 April, LVMH also noted a rebound in demand for its goods in Asia and gave investors a glimpse of what could come in its first-half results.

It announced recorded revenue of €21bn in the first quarter of 2023, up 17% compared to the same period of 2022. Organic revenue growth, meanwhile, was 17%.

“LVMH had an excellent start to the year, within a geopolitical and economic environment which remains uncertain. Europe and Japan, which enjoyed strong growth momentum, benefited from robust demand from local customers and international travellers; the United States, a market which continues to grow, had a steady performance. Asia experienced a significant rebound following the lifting of health restrictions,” LVMH said.

Unilever (ULVR.L)

Shares in Unilever, the maker of Ben & Jerry’s ice cream and Marmite, climbed nearly 5% on Tuesday after the company announced its half year results for 2023.

It reported underlying sales growth of 9.1% with prices increasing by 9.4% and volumes declining by 0.2%. The company’s underlying operating profit rose 3.3% to €5.2bn with profit margins improving slightly.

Unilever also said it expects 2023 underlying sales growth to be above 5%. However, with only a modest improvement in operating margins due to continued cost pressures.

Charlie Huggins, manager of the quality shares portfolio at Wealth Club, said: “These results from Unilever are solid but uninspiring.

“Despite significant price increases, Unilever has managed to maintain broadly flat volumes. This is a clear positive and suggests Unilever's brands continue to attract a loyal following. The other piece of good news is Unilever upping its full year sales guidance to "above 5%" and reiterating that operating margins will improve slightly, despite cost pressures,” he said.

Huggins said the question is now: "Should Unilever be doing better?"

“The answer is almost certainly yes. Margins remain well below pre-pandemic levels and below the bonnet of that robust underlying sales growth there are problems. Only 41% of Unilever's business is winning market share which means more than half the portfolio is losing out to competitors. And performance in Europe is exceptionally poor, with volumes falling 10% in the second quarter,” he said.

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