Microsoft’s Cloud Technology Leads to Impressive 4th Quarter Earnings

Microsoft Corporation (MSFT) has recently published better-than-expected earnings results for its 4th quarter, thanks to its success in the cloud technology market. When all was settled, the company recorded revenues in excess of $110 billion, with double-digit growth in the majority of its business sectors. The star product/service was the Azure cloud service which grew by a whopping 89% within the quarter. Overall year-over-year revenue growth was 17%.

Compared to the 4.9% gain in the S&P 500 SPX during the same quarter, Microsoft’s overall 22% gain in share price is worthy of notice. The company’s share price was already up by 3.7% in pre-market trading on Friday morning of July 20th 2018. Microsoft stocks are currently selling at slightly above $107 per share, having traded between $71.28 and $108.20 during the last 52 weeks.

Analysts predict that during the next 12 months, the stock could trade for about $113.47 per share. Goldman Sachs analysts put the projection even further at $125 per share based on the company’s 4th quarter results and expectations of further growth within the cloud technology segment. Other analysts believe that Microsoft may even deserve a space among the FAANG growth stocks – Facebook, Amazon, Alibaba, Netflix and Google (Alphabet). On the other hand, there are analysts who do not believe that Microsoft’s profitability is sustainable in light of the company’s need to increase its capital expenditure as well as its operating expenses over time.

Over 23 million stocks are currently in circulation with a market capitalization of $822.37 billion. Earnings per share (TTM) are not quite as impressive at 1.479, while the company’s PE ratio (TTM) is currently at 72.37. Forward dividend and yield on Microsoft stocks stand at 1.68 and 1.65% respectively. Analysts recommend a “buy” for Microsoft stock at this time.