Wall Street is bracing itself for another strong quarter from tech giant Microsoft Corporation (NASDAQ:MSFT).
When
Wednesday 29 January after market closeExpectations
Revenue $35.69 billion +9.9%
EPS $1.32 +20%
Microsoft shares had an impressive 2019, rallying 56% across the year and outpacing the broader U.S. market (S&P gained 22%). Microsoft is now one of the three U.S. companies to be a member of the exclusive $1 trillion dollar club, alongside Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL).
Azure
Microsoft has benefited greatly from its cloud business Azure. In the most recent quarter, Microsoft reported a strong 59% yoy increase in revenue. Traders will be watching closely to Azure’s performance in Q2 of 2020 to see whether this growth can be maintained? Expectations are for a deceleration of growth in the segment in line with the broader trend:
Azure Revenue Growth
Q3 2019 75%
Q4 2019 68%
Q1 2020 59%
Q2 2020 53% exp.
53% growth is still exceptional as Microsoft’s hybrid cloud is well positioned against peers Amazon (NASDAQ:AMZN) and Apple . Recent surveys by Morgan Stanley (NYSE:MS) and Credit Suisse (SIX:CSGN) showing that Azure was the preferred cloud enterprise option boding well for the outlook.
Analysts’ Recommendations
According to FactSet data among 35 analysts covering Microsoft stock, 33 have a buy rating, 2 have hold and 0 have sell.
Chart Thoughts
Microsoft trades above its 50, 100 & 200 sma in a bullish chart. Whilst it tested the 50 sma earlier this week, a rebound in the price means it is currently around 2% above the 50 sma.
Immediate support can be seen at yesterday’s low $160. Whilst resistance can be seen at the all-time high of $168.19.
