Why MSFT and META Performed Better than Feared

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In our preview reports for META and MSFT, we believed both companies were highly likely to outperform consensus expectations.

So far, large-cap tech stocks and the broader market have generally followed this playbook.

This stands in stark contrast to the prevailing sentiment among both buyers and sellers, with the vast majority expecting potential negative surprises from the Magnificent 7. This has created a peculiar market dynamic over the past two weeks, with long-only funds holding historically low positions in these names.

However, readers of our META and MSFT previews would understand that the probability of negative surprises this quarter was extremely low.

Looking at our quarterly previews for both META and MSFT, our assessments of performance and directional trends have aligned perfectly with the actual earnings reports for both this quarter and last.