Microsoft (MSFT) / Bill Gates 02 (Apr 18 - Dec 27)

[winston]

not vested

Microsoft posted its weakest quarterly revenue growth in five years, throttled by the surging US dollar and a slump in sales of Windows software to personal computer makers.

Sales in the first quarter, which ended Sep 30, rose 11 per cent to US$50.1 billion, the software maker said on Tuesday (Oct 25) in a statement.

Net income was US$17.6 billion, or US$2.35 a share.

While both numbers topped analysts’ average estimates, revenue from Microsoft’s closely watched Azure cloud-computing services decelerated to 35 per cent - partly because of foreign-currency exchange rates.

Excluding the impact of the rising dollar, Azure sales rose 42 per cent, below some predictions.

Demand has held up for Azure services, which run and store businesses’ software applications, and web-based versions of Office productivity programmes, even as customers pare some other corporate spending while the global economy teeters on the brink of a recession.

Still, Microsoft gets almost half of its revenue overseas. The US dollar soared to new highs against a basket of foreign currencies last month, meaning Microsoft’s international sales were worth less when brought back home.

Revenue from sales of Windows software to PC makers swooned 15 per cent in the recent period. That mirrored the quarterly contraction in PC shipments reported this month by market research firm IDC, which cited “cooling demand and uneven supply”.

“The tone has definitely changed,” said Dan Morgan, a senior portfolio manager at Synovus Trust. “We’ve started to get a big change-up in software spending surveys - there’s a general consensus of ‘hey, you know, the economy is slowing down and we’re watching our expenses.”

Source: Phillips

[winston]

vested

Microsoft (MSFT)

Market cap of $1.72 trillion, Microsoft ranks 2nd on the list of the world’s most valuable companies.

Shares now sit 31% into negative territory for the year.

At first glance, however, that seems a bit strange as the tech giant beat the estimates on both the top-and bottom-line.

Revenue clocked in at $50.1 billion, in turn beating the analysts’ call by $410 million, while the company posted EPS of $2.35, $0.06 above the $2.29 consensus estimate.

Against a backdrop of a soft PC market and a strong dollar, revenue climbed by just 10.6% year-over-year, amounting to the slowest quarterly revenue growth seen in 5 years.

And despite the beat on the bottom-line, at $17.6 billion, net income represented a 14% decline from the same period a year ago.

Azure cloud also underperformed; its 35% revenue growth might seem healthy, but it represented a deceleration and came in below the analysts’ expectations.

MS; “Bottom line, while heavier cyclical weights brings down our FY23 EPS estimates, we remain firmly convicted in the longer-term secular growth story at Microsoft, which we forecast drives a high-teens total-return profile over the next five year, framing an attractive risk/reward with shares trading at 23X our CY23 EPS.”

Weiss sticks with an Overweight rating, although there is a trim to the price target which is lowered from $325 to $307. Still, there’s upside of ~31% from current levels.

Wall Street remains mostly in the tech giant’s corner; based on 28 Buys vs. 3 Holds, the stock boasts a Strong Buy consensus rating.

Source: TipRanks

[winston]

vested

Microsoft Corporation (MSFT)

The company did beat on the top and bottom lines: Earnings of $2.35 per share and revenue of $50.12 billion beat analysts’ expectations for earnings of $2.30 per share and revenue of $49.61 billion.

However, Microsoft missed on revenue forecasts for its cloud divisions and lowered forward-looking guidance.

Microsoft’s Intelligent Cloud business segment, which includes the Azure and other cloud services, generated $20.33 billion in quarterly revenue, up 20% year-over-year but less than the $20.36 billion estimated.

Microsoft expects $52.35 billion to $53.35 billion in revenue for the fiscal second quarter, which would be 2% growth. This missed analyst expectations for $56.05 billion.

CFO Amy Hood noted weak demand for PCs in September will continue to hit the company’s consumer segment.

Bottom line: The decline in PC sales and the dollar's strength – as MSFT is a multinational company that is adversely affected by a strong U.S. dollar – continued to weigh on its profits and growth.

Microsoft was recently downgraded to a C-rating, or a “Hold.”

Source: Market 360

[behappyalways]

Microsoft Extends Losses On Cloud Margins, Weak Q2 Guidance
https://www.zerohedge.com/technology/ms ... n-pressure

[winston]

vested

Microsoft Corp - Azure drives growth despite currency headwinds

1Q23 revenue/PATMI was within expectation at 23% of our FY23e forecasts.

Total revenue grew 11% YoY to US$50.1bn driven by a 20% YoY rise in cloud business.

PATMI fell by 14% YoY (2% YoY growth normalised) as margins contracted due to investments in Azure as well as US$3.3bn tax benefit in 1Q22.

Azure revenue grew 42% YoY in constant currency driven by increasing cloud adoption.

Office 365 Commercial revenue grew 17% YoY due to subscriber growth of 14% YoY and higher average revenue per user due to strong adoption of E5 license.

We maintain a BUY recommendation with a lower DCF target price of US$319 (WACC 7.2%, g 4%), down from US$332.

Source: Phillips

https://www.poems.com.sg/stock-research/MSFT/

[behappyalways]

Microsoft Slides After FTC Blocks Activision Deal, Drags Market Lower
https://www.zerohedge.com/markets/micro ... rket-lower

[winston]

not vested

Undervalued Dividend Growth Stock of the Week: Microsoft (MSFT)

by Jason Fieber

Source: Daily Trade Alert

https://dailytradealert.com/2023/01/01/ ... ft-msft-2/

[winston]

not vested

Microsoft shares lag Big Tech peers as growth worries prompt UBS downgrade

Source: Reuters

Worries over slowing growth for its cloud services and Office suite.

Battling lower spending by businesses reeling with rising borrowing costs.

Declining spending on enterprise software from companies cutting costs and slashing jobs could also weigh on Microsoft's Office 365 business this year.

https://www.theedgemarkets.com/node/650516

[winston]

not vested

Microsoft has several big opportunities ahead of it

by Trevor Jennewine

Microsoft 365 is the most popular enterprise application suite, and the Windows operating system is the gold standard for personal computers and data center servers.

In the most recent quarter, revenue increased just 11% to $50.1 billion, while earnings dropped 13% to $2.35 per diluted share.

The first is cloud computing. Microsoft Azure accounted for 21% of cloud-infrastructure and platform-services spend in Q3, making it the second most popular cloud vendor. In fact, Microsoft has nearly twice as much market share as third place Alphabet. That puts the company in a good spot, as cloud spending will grow at 20% annually to reach $1.7 trillion by 2029, according to Fortune Business Insights.

The second exciting growth opportunity is digital advertising. It may surprise some investors to learn that Microsoft is currently the seventh largest digital ad company in the world, but platforms like LinkedIn and Bing Search have allowed the company to develop a foothold in that market.

Better yet, Microsoft provides the ad tech that powers Netflix’s ad-supported streaming service. That exclusive partnership should help Microsoft tap into the online video ad market, which is expected to grow at 14% annually to reach $362 billion by 2027. Meanwhile, Statista says the broader digital ad market will grow at 10% annually to surpass $1 trillion over the same time period.

The third exciting growth opportunity is cybersecurity. Analysts recognize Microsoft as a leader across several industry verticals, including security information and event management, unified endpoint management, and access management. And those accolades have come alongside strong growth.

For instance, Microsoft increased its security customer count by 33% in the most recent quarter. More than 860,000 organizations now rely on its cybersecurity software. That puts Microsoft in a good spot. The cybersecurity market is expected to grow at 12% annually to surpass $500 billion by 2030, according to Grand View Research.

With that in mind, shares of Microsoft currently trade at 25 times earnings. That is not cheap in a traditional sense, but it is reasonable in the context of Microsoft’s growth opportunities, and it is a discount compared to the three-year average of 32.1 times earnings. That’s why this stock is worth buying today.

Source: The Motley Fool

[behappyalways]

Microsoft Reportedly Investing $10 Billion In Musk Co-Founded ChatGPT Creator
https://www.zerohedge.com/technology/mi ... pt-creator