Microsoft Earnings Preview: Will Azure Growth Outshine Rivals Amid AI Integration?
2024.10.29 09:25
As Microsoft (NASDAQ:) heads into its next earnings report on Oct. 30, all eyes are on its ability to shake off recent disappointments and reaffirm its tech dominance.
Microsoft’s latest quarterly results sent shockwaves through the market, knocking it down from its perch as the world’s most capitalized company.
Source: InvestingPro
Now, with expectations high, the tech giant aims to show it’s back on track and ready to compete with the best.
Microsoft, currently valued just behind Nvidia (NASDAQ:) and Apple (NASDAQ:), could reclaim investor confidence with strong results this quarter.
In particular, the focus is on the performance of its cloud division, Azure, which disappointed last time with revenue growth below analyst expectations.
Despite being a crucial driver, Azure’s growth of 29% last quarter fell short of the 30.58% expected, which rippled through the stock and raised questions about Microsoft’s ability to keep pace with Amazon (NASDAQ:) and Google (NASDAQ:) in the cloud race.
What Analysts Are Forecasting
Analysts have nudged their earnings-per-share (EPS) estimates up slightly to $3.10, indicating confidence that Microsoft can deliver, while revenues are projected to hit $64.5 billion—a 14.2% year-over-year increase.
Source: InvestingPro
This outlook translates to growth rates of 3.7% for EPS and a significant boost in sales, underscoring Microsoft’s resilience and investor optimism.
Source: InvestingPro
Stock Outlook: Is Microsoft Fairly Priced?
According to InvestingPro’s models, Microsoft appears fairly valued at around $403.72, only slightly below its recent closing price.
Source: InvestingPro
However, analysts on average target a higher price, setting their sights at $499.7—a bullish 17% upside, backed by 52 “Buy” ratings out of 57 surveyed analysts.
This optimism underscores high expectations but also the pressure on CEO Satya Nadella to deliver the kind of results that can maintain Microsoft’s spot in the exclusive $3 trillion club.
With earnings season ramping up, Microsoft’s report will be a key indicator not only of its own performance but of the broader tech landscape, setting the tone for investor confidence ahead of Big Tech earnings due later this week.
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