Microsoft reported good earnings this week, but is it enough to bolster the confidence of investors?
Reuters reports that the company considers its cloud business to be well poised for expansion in the year to come. In addition, in reporting numbers for Q4, Microsoft showed $51.7 billion in sales, up 20%, and a 21% increase in profit to $18.8 billion.
The company also reportedly has $125 billion cash to go into new projects, such as purchasing Activision, which has been on the radar in the gaming community.
Executives also reported strong enterprise sales for Windows software in recent months.
In stock activity, Microsoft dropped yesterday, then corrected. Some believe it is prepped for higher prices now.
Despite chip shortages that limited the supply of the new Xbox console during the holiday season, the company’s gaming business grew 8 percent, part of its personal computing segment, which grew 15 percent to $17.5 billion,” writes Karen Weise at the New York Times, in a piece detailing some of the bullish sentiments around MS. “The so-called Great Resignation among workers also helped LinkedIn, the professional social network, which saw revenue increase 37 percent.”
It’s good to keep an eye on this massive technology stock, because it’s a good bellwether for how markets are going. To the extent that Microsoft can continue to expand and scale, that has a ripple effect in this area of the market.
In fact, some consider that Microsoft positivity on the cloud may extend to some of its rivals as well.
“Sales of Microsoft’s cloud offerings to commercial customers, which includes Office 365 subscriptions and Azure, its cloud computing platform, grew 32 percent to $22.1 billion,” Weise writes. “Revenue is poised to grow further as price increases for Office 365, which includes Word and the Teams communications app, go into effect in March. The price increases could produce $5 billion in extra revenue this year, according to Wedbush Securities.”
Watch the winds of change in technology if you have related holdings.