Analysts and investors waited patiently for Alibaba Group Holding Ltd. (NYSE:BABA) and Microsoft Corporation (NASDAQ:MSFT) to post earnings. Alibaba fans feared that the company would be severely impacted by the market slowdown in China over the summer while Microsoft investors were hoping that they wouldn’t see another flop like Windows 8. Since both companies released earnings, analysts are now weighing in with reflections and new expectations.

Alibaba Group Holding Ltd.

Chinese ecommerce giant Alibaba reported strong quarterly earnings yesterday after market close in which the company beat Street estimates for both revenue and EPS. Following the results, Mark Mahaney of RBC Capital weighed in on the stock, reiterating an Outperform rating and raising his price target from $80 to $95.Mahaney stats

Alibaba’s quarterly revenue of 22.2 billion RMB was higher than Mahaney’s own estimates of 21.1 billion RMB, as well as the estimates of the Street (21.3 billion RMB). Furthermore, Alibaba posted EPS of 3.63 RMB, higher than the analysts’ expectations of 3.22 RMB. This outperformance is attributed to a 35% growth in China Retail to 17.3 billion RMB, which was 7% above his estimates, and improvement in mobile monetization (2.39% increase against his estimates of 2.10%). This improvement has led to a year-over-year growth of 183% in mobile revenues to 10.5 billion RMB.

The company has also seen accelerated growth in cloud computing (128% year-over-year), even though this segment represents only 3% of total revenues. However the growth of active buyers decelerated to 25% year-over-year, coming in at 385 million for the quarter. Due to the overall positive results, Mahaney increased his estimates for the future, explaining, “Our FY2017 Revenue increases 8% while EBITDA increases 11% to 136 billion RMB and 72 billion RMB, respectively.”

Mark Mahaney has a 64% overall success rate recommending stocks with an average return of +21.1% per rating. According to TipRanks, 24 analysts have weighed in on Alibaba in the last 3 months. A majority (22) has rated the stock as a Buy with only 2 analysts rating it as Hold; none of the analysts recommend to Sell the stock. The average price target for the stock is $93.26, an upside of 17.40% from where the stock last closed.

Microsoft Corporation                     

Last week, Microsoft announced results for the first fiscal quarter. Daniel Ives of FBR Capital weighed in on the stock, reiterating an Outperform rating with a $60 price target.Ives stats

Ives notes three fundamental changes made by Satya Nadella, the company’s CEO, which he considers as driving forces. First, Nadella quickly realized that the Nokia acquisition was going to be a failure and took swift action in cost-cutting and writing off. Second, the CEO reduced headcount in order to boost cash flow and margins, while  remaining focused on the company’s cloud initiatives like Office 365/Azure. Lastly, Nadella developed the cloud-centric Windows 10 platform and had the “genius move” of distributing the platform via free downloads and listening to what customers wanted.

In regards to the company’s cloud initiatives, given the rapid adoption of cloud by organizations of all sizes, Ives feels the stage is set for Microsoft to become a leading force in this category. While there are concerns around the slowing PC market, Ives is positive that Microsoft has recently reported about 110 million devices running on Windows 10. In this context, Ives says, “Overall, we believe Mr. Nadella is taking necessary steps (e.g., free Windows on certain mobile devices, laser-focus on cloud/mobile) to ensure Windows successfully makes the transition to mobile devices and that longer-term growth coming off the PC market will be more than offset by growth in the cloud.” The analyst concludes, “Overall, we believe the ‘Nadella era’ at Microsoft is on track as he veers away from the status quo, representing a breath of fresh air for investors.”

Daniel Ives has rated Microsoft 24 times since 2013, earning an 89% success rate recommending the stock with an average return of +12.8% per MSFT rating. Out of 23 analysts on TipRanks who have recently rated Microsoft’s stock, 15 have rated it as Buy, 5 have rated it as Hold, and only 3 have given a Sell rating to the stock. The average consensus price target for the stock is $54.19, an upside of 0.93% over current levels.