Last night's earnings reports from tech giants Microsoft and Meta showed strong performance, but there were flaws in their future guidance.

Microsoft's revenue reached $65.5 billion, exceeding the expected $64.5 billion, with a 16% year-over-year growth, surpassing the anticipated 15%. Earnings per share (EPS) were $3.3, beating the expected $3.1 billion. The most critical segment, Microsoft's cloud business Azure and other cloud services, saw revenue growth of 33%, or 34% excluding currency fluctuations, slightly slower than the 35% growth in Q2 but still higher than analysts' expectations of 30.4%. However, during the earnings call, the company indicated that cloud business growth would continue to slow next quarter, and Microsoft's capital expenditures are still increasing, raising market concerns.

The same applies to Meta, with revenue of $40.59 billion, up 19% year-over-year, exceeding the expected $40.25 billion.

EPS was $6.03, higher than the expected $5.25. However, the lower end of the revenue guidance for the next quarter was below market expectations, and the lower end of the capital expenditure forecast was also higher than expected.

It seems we're entering another phase of valuation digestion.$Microsoft(MSFT.US)$Meta Platforms(META.US)