Microsoft (MSFT) Stock Price Up 3.40%, Earnings Are Expected to Grow

UTC by Christopher Hamman · 3 min read
Microsoft (MSFT) Stock Price Up 3.40%, Earnings Are Expected to Grow
Photo: Edmund Tse / Flickr

Microsoft (MSFT) stock price gained around 3% yesterday but is slightly down today in the pre-market. The company’s earnings are expected to grow by about 20% this quarter.

Microsoft Corporation (NASDAQ: MSFT) stock price rose by about 3%. This happened during the last trading session. Sources say that the Redmond Washington technology giant has had a good run this year. This news comes as most of the world is reeling from the coronavirus pandemic.

At the press time, in the pre-market, Microsoft (MSFT) stock price was $172.62 (-0.52%).

Certain technology industries at this time are doing well. They represent the all-weather stocks. The movement restrictions have a lot to do with this. Microsoft (MSFT) and a few others it seems are beneficiaries of the emerging trends.

Microsoft (MSFT) Stock Price Is Rising Thanks to Emerging Trends

Most people who still have jobs are working remotely. The demand for a new ecosystem where working remotely is key is one of the core drivers behind the rise in Microsoft stock prices. Apart from this, analysts expect revenues of up to $36.93 billion this quarter. As the quarter draws to a close, stock prices of the Windows software developer are leaping in expectation to this. Quarterly earnings are expected to be announced on the 29th of this month.

A cursory look at Microsoft’s operating business model gives insight into what to look for before next week.

Microsoft’s Flagship products are still doing relatively well. Some certain sub-units are the key drivers of growth at this time. Linkedin, Surface, and Azure are the new engines of profit for Microsoft.

Microsoft’s acquisition of Linkedin in 2016 was considered to be a blunder by many pundits at the time. Four years later, the $26.2 billion transaction seems to have paid for itself many times over. For the first year or so, Linkedin didn’t bring in any revenue until 2017. The expected revenues of about $2 billion this quarter say much. This is proof-of-concept that the acquisition of the social network is indeed profitable.

Microsoft’s Surface division recently added new products. This innovation points to one fact. An ecosystem is growing silently. Then the COVID-19 pandemic came along. It blew the Surface ecosystem out of the water. Surfaces’ revenues haven’t risen to similar levels last year.

The revenues will still rise as demand for hardware increases with supply issues. these supply issues have arisen because of the shutdown.
Crossing $1 billion in revenues, the Surface may see significant improvement in sales.

Azure Rules the Pack

Microsoft Azure is currently the King of the hill. Azure has estimated revenues of more than $10 billion by analysts. We are seeing just about the only competitor to Amazons AWS. Amazon still rules the computing space with estimated revenues of over $30 billion.

This presents a scenario where Azure could catch up with AWS. It could even go head-to-head with it. The Microsoft-Amazon Department of Defense (DoD) contract spat is one such example of this. Though the DoD is working on having its independent JEDI cloud platform.

Overall, analysts estimate that Microsoft’s revenues have increased by about 20% from last year. This growth while marginal is still within positive territory.

It also represents the setting of a new trend among the big technology companies. One where anything is possible. All bets are off!

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