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Trending tickers: Google, Microsoft, Vodafone, GSK

FILE - The San Francisco-Oakland Bay Bridge is seen behind a Google sign at the company's office in San Francisco on April 12, 2023. Google lost an antitrust lawsuit over barriers to its Android app store, as a federal court jury has decided that the company's payments system was anticompetitive and damaged smartphone consumers and software developers. (AP Photo/Jeff Chiu, File)
Google down 5%. (ASSOCIATED PRESS)

Google (GOOG)

Google stock was down more than 5% in premarket on Wednesday, after company results revealed revenue in its crucial ad vertical had fallen short of analysts' expectations in its latest financial update.

Stock dropped despite it beating revenue estimates from Wall Street. Revenue hit $86.3bn (£68.05bn) versus predictions of $85.3bn. EPS was $1.64, outdoing consensus expectations of $1.59 per share.

The results highlight the question at the heart of big tech firms which have made their fortunes off tools like search: with search being one of the powerhouses of revenue for the Google-parent, how will the impact of AI play out on margins?

Microsoft (MSFT)

Tech giant Microsoft's second quarter earnings topped Wall Street estimates across the board on Tuesday when it reported after the closing bell.

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It clocked earnings per share of $2.93 – better than the expected $2.78 – while revenue of $62bn beat estimates of $61.14bn.

The results got a boost from both its personal computing and productivity and business processes units. In the release, chairman and CEO Satya Nadella said: "We’ve moved from talking about AI to applying AI at scale."

Microsoft's all-important cloud revenue topped out at $33.7bn, beating estimates of $32.2bn. The company's Intelligent Cloud business, which includes its Azure service, came in at $25.8bn versus expectations of $25.3bn. According to the company, AI services contributed 6 percentage points of growth to Azure revenue, increasing from 3 percentage points last quarter.

Despite the beat, its stock was lower in premarket trade, dragging down the Nasdaq.

Vodafone (VOD.L)

Telecoms giant Vodafone led fallers in the FTSE 100 this morning, dipping more than 4% after news broke that it had rejected a further merger proposal from the Italian Iliad Group to join up the pair's Italian businesses.

The merger between Iliad Italia and Vodafone Italia would have seen a 50/50 deal, with Vodafone receiving €6.6bn cash and a €2bn shareholder loan.

The bid represented a €100m increase from the initial proposal last month.

GSK (GSK.L)

GSK stock was also down 1% by mid-morning in London, even as it upped its outlook, announced a new raft of products and posted a bump in pre-tax profits.

The group posted a 14% increase in pre-tax profits on a constant currency basis to £6.1bn for 2023 after sales rose 5%.

“We are now planning for at least 12 major launches from 2025, with new Vaccines and Specialty Medicines for infectious diseases, HIV, respiratory and oncology," said CEO Emma Walmsley.

“As a result of this progress and momentum, we expect to deliver another year of meaningful sales and earnings growth in 2024, and we are upgrading our growth outlooks for 2026 and 2031.”

Its 2021-2026 outlook for the compound annual growth rate (CAGR) of sales is now set at more than 7% and the company expects for adjusted operating profit to more than 11% CAGR.

The group saw vaccine sales jump 25% in 2023, including £1.2bn of sales of Arexvy – the world’s first approved RSV vaccine for older adults.

Watch: AI stocks slide after Google, Microsoft disappoint

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