The technology company Microsoft showed that it had incredible months, exceeding all expectations. However, it was not enough for the market. The company that is part of the “magnificent 7” failed to surprise positively.
“A high rating means that even the most slightest hint of disappointment will be seized upon by investors, and Microsoft’s guidance for revenue growth in its cloud division to weaken somewhat in the current quarter was enough to see the stock fall modestly,” analyzes Russ Mold, chief investment officer at AJ Bell. In that framework, Shares fall up to 1% in Wall Street premarket.
Bankinter experts also agree that “the quarter’s figures exceeded expectations in all lines, however, the guidelines for the next quarter were not positively surprising.”
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And the disappointment has come hand in hand with his ‘guidance’. For Azure, Microsoft said it expects growth to remain stableand intelligent cloud revenue is between $26 billion and $26.3 billion, a modest increase from $25.9 billion in the previous quarter.
“Some market participants were disappointed that Microsoftt did not offer guidance for the fiscal third quarter in the results report, opting instead to do so in the results conference call. Investors were generally unimpressed by the earnings report, expecting a further exceedance of estimates“comments Jesse Cohen, senior analyst at Investing.com.
All in all, the technology company has demonstrated with its results why it is the most valuable company on the planet, and shows no signs of slowing down. “Satya Nadella and his team were early adopters of AI, made strategic investments and are now blowing up their competition,” underlines Ben Laidler, global markets strategist at the investment and trading platform eToro.
“Microsoft delivered a tremendous quarter, exceeding expectations thanks to the performance of all business units,” adds Cohen.
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The company is operating at full capacity andAI is clearly driving growth. The results indicate that AI products are boosting sales and already contributing to revenue and expense growth.
“Where the market will look closely at Microsoft is efficiency with which this money is spent. Any sense that the company is simply throwing cash at AI whether it wants to or not and expecting some of it to pay off would not be very welcome,” Mold insists.
Microsoft has obtained a net profit of $21.87 billion in its second fiscal quarter of 2024, which represents an increase of 33% compared to the figures for the same period of the previous year. This translates into some gearnings per share of $2.93, which has allowed the firm to exceed market expectations, set at $2.78 per share.
Revenues for the quarter have also been better than expected, after recording an increase of 18% that has raised them to 62,020 million, while the forecasts were 61,120 million dollars.
For this reason, Bankinter reiterates that “we continue to consider that Microsoft is a attractive value to have in your portfolio”.
Source: Ambito
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