Microsoft, one of the companies that makes up the group of the Magnificent 7, began to cause some doubts in the market. Analysts maintain that there would be other values within the technology sector with upside potential, even despite the announcements that this company made within the framework of its strong commitment to Artificial Intelligence.
The software company’s shares fell 1% in the last half compared with a nearly 10% rise in the Nasdaq 100 index.
Furthermore, their latest balance sheets They weren’t that good, in fact, according to analysts The stock trades at 31 times estimated earnings and almost 11 times expected revenue.. For comparison, the Nasdaq 100 trades at less than 26 times forecast earnings and less than 5 times sales.
Besides, Google filed a complaint with the European Commission against Microsoftaccusing it of anti-competitive practices in the field of cloud computing, the American giant announced on Wednesday.
“We believe that this action before the regulator is the only way to end the blockade practiced by Microsoft, allow customers have choices and create fair market conditions for competitors“said Amit Zavery, general manager and vice president of the Google Cloud platform, at a press conference.
“Microsoft’s software licensing terms prevent (…) moving current workloads from Azure [la plataforma en la nube de Microsoft] to competing clouds”Google explained in a statement.
Companies that own Microsoft’s Windows Server operating system and want to run it on another cloud platform, such as Google Cloud or AWS (Amazon’s service), face exorbitant costswhich can reach a 400% increase in prices, in addition to “limitations in security patches,” denounced Google, which presented its claim, which does not represent a formal complaint, on Tuesday night.
According to the American giant, Microsoft began implementing increasingly severe restrictions on the use of its software starting in 2019, establishing multiple “interoperability barriers”.
How the 7 Magnificas fared during 2024
The S&P 500 index, which includes the top 500 companies in the United States, is on track to post a double-digit return for the second year in a row.
“The accumulated performance in 2024 is 20% and is largely explained by a handful of technology companies with high market value that have been presenting exceptional growth for several years,” Cohen explained.
This group of companies is popularly known as the “magnificent 7” and includes Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla. These seven companies accumulate an average return of 39% in 2024 and, given that together they explain 31% of the S&P 500, they constitute the greatest force behind the return observed in the North American index.
However, within this group, Nvidia stands out with a return of 135%, making the largest contribution, followed by Meta with 60% and Amazon with 28%.
Source: Ambito
