All eyes will be on the Nasdaq index tonight after two of its largest companies released their quarterly updates.
The companies in question are tech giants Alphabet Inc (NASDAQ: GOOG) and Microsoft Corp (NASDAQ: MSFT).
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How did these two giants of the Nasdaq perform?
Unfortunately for shareholders, both companies appear to have disappointed investors during the three months ended 31 December.
As a result, Alphabet shares are down almost 7% and Microsoft shares are down 2.5% in after-hours trade on Wall Street.
Let's take a closer look at what they both reported.
Alphabet results
The Google and YouTube owner actually delivered a result ahead of consensus estimates. However, it was a miss on advertising revenue which spooked investors.
Alphabet posted a 13% increase in revenue to US$86.31 billion, representing its best quarterly growth in almost two years. This was ahead of the consensus estimate of US$85.33 billion.
However, its advertising revenue of US$65.52 billion missed expectations by almost US$500 million.
Earnings per share also came in stronger than expected at US$1.64 per share (versus the consensus estimate US$1.59 per share).
Sundar Pichai, CEO, said: "We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come."
Microsoft results
Microsoft shares also look likely to fall on the Nasdaq index tonight despite its result beating expectations.
It reported revenue of US$62.02 billion and earnings per share of US$2.93. This compares to consensus estimates of US$61.12 billion and US$2.78 per share, respectively.
This outperformance was driven by strong cloud (Azure) growth. Microsoft Cloud revenue was US$33.7 billion for the quarter, up 24% year-over-year. It remains unclear why investors haven't responded more positively to the result.
And just like Alphabet, Microsoft spoke positively about how AI is impacting its business.
CEO Satya Nadella said: "We've moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we're winning new customers and helping drive new benefits and productivity gains across every sector."
