![]() In his view, Microsoft's narrative "likely gets better" in the second half of the calendar year. "While the optimization overhang on Azure is likely to persist near term, we believe that the upcoming monetization opportunities related to AI across the business more than make up for what is a temporal overhang and Microsoft's broad cloud platform is a material differentiator in a world where customers remain focused on value," he wrote, meaning that Microsoft "will take share in cloud." Zukin has an outperform rating on Microsoft's stock, and he lifted his target price to $350 from $330 following the report.Įvercore ISI's Kirk Materne thought that Microsoft's latest results showed why it is poised to take market share in the tough economic climate, while also leading "the architectural shift to AI." He said that Microsoft's report constituted "yet another re-run of 'Softie Saves Software,'" with the company's fiscal fourth-quarter outlook for 26% to 27% constant-currency Azure growth "better than buy-side expectations against the most negative channel check backdrop in recent memory." "We believe the answer is MSFT masterfully executing a portfolio selling approach that is resonating with customers wanting to consolidate (spend less, but get more)." "The big question was how was it possible that the performance (on both a bookings and consumption basis) was so strong, when the macro headlines and everyone's checks (including ours) were so negative," Zukin wrote in a note to clients. Wolfe Research analyst Alex Zukin noted that "the macro isn't improving," but Microsoft's "relative execution is showing up in a big way." ![]() ![]() He upped his price target to $306 from $263 in his report. Overall, he came out of the report feeling "bullish on software for 2023" and recommending that "investors should have exposure to this name here," though he rates Microsoft's stock at market perform as he's waiting for "more clarity or a better entry point to see true outperformance." In his view, Microsoft's results were "exactly what software needed, at the right time." While there's still some "cloud cautiousness" for Microsoft, he thinks that "will begin to fade as the macro environment improves and that the other growth drivers will become more pronounced." "But cloud revenue and AI demand carried results in the quarter and should start to ease investor concerns around software." "The tone in software heading into Microsoft earnings was pretty much doom and gloom with a lot of hedging going on ahead of the print," SVB MoffettNathanson analyst Sterling Auty wrote in a note to clients. See more: Microsoft stock zooms toward highest prices in a year after strong earnings, forecast But Microsoft sent a more upbeat signal with its after-hours results, as its Azure cloud-computing business topped growth expectations, as did the part of the company housing Office software. (TENB), a cybersecurity player, warned that reverberations from the banking crisis were weighing on deals. Just a day ago, software stocks broadly sold off in Tuesday's regular session after Tenable Holdings Ltd. The company's results offered some welcome relief to the software sector against what one analyst described as a "doom and gloom" backdrop. Read: Bill Gates will be $2 billion richer as Microsoft's stock logs record price gain is blocking Microsoft's deal for Activision and what comes next 23, 2015, when it advanced 10.1%, according to Dow Jones Market Data. The 7.2% gain in Microsoft's stock was its largest post-earnings increase since Oct. Microsoft's rally largely held up Wednesday even as the U.K.'s Competition and Markets Authority announced in the morning that it would prohibit Microsoft from merging with Activision Blizzard Inc (ATVI), a decision Microsoft plans to appeal. (INTC) and International Business Machines Corp. That's more than the current individual valuations of Advanced Micro Devices Inc. company, according to Dow Jones Market Data. Wednesday's increase was the seventh-largest daily increase in market value for a U.S. That was just shy of Microsoft's record one-day market-cap haul of $150.37 billion achieved March 13, 2020. Shares of Microsoft (MSFT) enjoyed a 7.2% post-earnings rally Wednesday, enough to add $148.34 billion to the company's valuation. fell narrowly short of topping its daily record for market-capitalization gains Wednesday, though the company still racked up one of the biggest single-day increases on record for any U.S. Wednesday's market cap gains are bigger than the current individual market caps of AMD, Intel and IBM
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