Company / Analytics

Analytics, 22 March 2023

Microsoft Stock Update

Microsoft, one of the world’s largest and oldest technology companies, has been generating a lot of buzz in the stock market recently. With positive analyst ratings and institutional investors showing interest, the company’s stock has been on an upward trajectory.

Microsoft has transformed itself from a consumer software company to a tech powerhouse, with a strong presence in gaming, cloud computing, and artificial intelligence. The company’s Azure cloud services platform, in particular, is experiencing rapid growth and could be operating in a market worth $1.5 trillion per year by 2030. Microsoft’s Bing search engine also has significant potential for growth and could generate billions of dollars in revenue if it gains even a small share of the search industry’s market. With all these factors in play, it’s no surprise that analysts are bullish on Microsoft’s future prospects.

In this article, we shall discuss Microsoft company plus how its stock is currently doing on the market.

Microsoft Company

Microsoft has been on an upward trajectory for some time now, with various research analysts issuing reports on the company’s stock. Evercore ISI recently raised its price objective for Microsoft from over 250 to almost 300 dollars, indicating a potential upside of about 5.5% from the stock’s previous close. Other analysts have also issued bullish reports on the stock, with Goldman Sachs Group setting a price objective of over 300 dollars and some analysts raising their price target from 280.00 to 325.00 dollars, giving the stock a “buy” rating. Despite Guggenheim downgrading the stock from a “neutral” rating to a “sell” rating, the consensus rating on the stock is currently “Moderate Buy,” with an average target price of 287.30 dollars.

Despite insider selling, institutional investors have shown interest in the company’s stock, with Vanguard Group Inc. increasing its stake in the company by 1.0% in the third quarter and State Street Corp increasing its stake by 0.7%. Overall, Microsoft appears to be a strong stock with positive analyst ratings and potential upside.

Microsoft has transformed itself from a consumer software company to a tech powerhouse in gaming, cloud computing, and artificial intelligence (AI). By expanding beyond its core areas of expertise, Microsoft has aggressively pursued industries with high growth potential, such as building its own hardware businesses and developing its Azure cloud services platform, which is the fastest-growing part of Microsoft’s business. Microsoft’s Bing search engine, which currently has a global market share of just 3%, could soon see significant uptake thanks to its multibillion-dollar investment in OpenAI, the developer of the revolutionary ChatGPT chatbot powered by AI. According to a forecast by Ark Investment Management, generative AI software like ChatGPT could attract $14 trillion in revenue by the end of this decade.

Microsoft’s greatest opportunities are still ahead, and by 2030, Azure could be operating in a market worth $1.5 trillion per year. Microsoft estimates the global digital advertising market is worth $500 billion, with 40% of that amount, or $200 billion, coming from search. By gaining just 1% of the search industry’s market share, Microsoft could generate $2 billion in revenue per year. With Bing’s recent spike in adoption, it’s possible for Bing to achieve a market share of 25% by 2030, contributing $50 billion per year to Microsoft’s revenue.

Microsoft Stock

From a valuation perspective, if Microsoft’s annual revenue continues to grow. On Monday, the stock opened at 279.43 dollars, with a 1-year low of 213.43 dollars and a 1-year high of 315.95 dollars. The company has a market cap of 2.08 trillion dollars, a P/E ratio of 31.05, a P/E/G ratio of 2.57, and a beta of 0.92. MSFT’s 50-day moving average is 252.31 dollars, and its 200-day moving average is $245.31. The company has a current ratio of 1.93, a quick ratio of 1.89, and a debt-to-equity ratio of 0.24.

Microsoft’s last quarterly earnings report beat the consensus estimate of $2.27 by $0.05, with earnings per share of $2.32. The company had revenue of $52.75 billion for the quarter, compared to analyst estimates of $53.17 billion. MSFT had a return on equity of 39.87% and a net margin of 33.05%. The company’s revenue was up 2.0% compared to the same quarter last year. Equities analysts anticipate that MSFT will post 9.34 earnings per share for the current fiscal year.

Investor’s Note

Microsoft has established itself as a technology powerhouse, with strong potential for growth in various industries such as cloud computing, artificial intelligence, gaming, and hardware. The company has shown a willingness to adapt and expand beyond its core areas of expertise, as demonstrated by its Azure cloud services platform and Bing search engine. Microsoft’s recent investment in OpenAI and its ChatGPT chatbot could prove to be a significant driver of revenue growth in the coming years, particularly if generative AI software continues to attract substantial investment.

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