Microsoft Corporation. The fiscal year 2023 financial results for the third quarter will be published after market close on Tuesday, April 25, 2023. The share price has soared this year largely due to a boost in artificial intelligence and renewed confidence in the Bing search engine. An erratic macro environment can increase risks to some metrics of growth and profit margins, particularly from the enterprise PC business.
In the most recent quarter (Fiscal Year 23, Q2), Microsoft Achieve overall revenue growth of 7%which was largely due to A.J 16% Dip in the PC business. Microsoft continued to show double-digit growth in its most important business segments in enterprise technology and cloud computing, which generated net margin of 31%.
The market expects Microsoft to be the only major technology company to see revenue growth this quarter, albeit by a smaller percentage. Revenue is expected to increase 3.6% on Microsoft’s business, which provides vital, everyday software and services, which has proven more resilient in the current economic climate, despite declining sales of PCs and other devices. Microsoft smart cloud The division is expected to post slower growth for the sixth consecutive quarter, with sales expected to rise by less than 15%, as companies reduce spending. Azure is expected to maintain the above 30% growth but also shows fading momentum.
Productivity and business operations from Office and other software could be a bright spot as analysts expect revenue and operating profit to increase for the first time in more than a year and a half. Increased costs will shrink profit margins and lower cash flow. Microsoft is starting to get costs under control, after announcing 10,000 job cuts in January, and a commitment to refocusing on secular growth and long-term competitiveness will stabilize the pressures.
Public interest in new developments will be on the development of artificial intelligence. Microsoft has stated that it can compete on much lower margins to extract business from its competitors. Meanwhile, Microsoft Corp. And epic They announced earlier in the week that they were expanding their long-term strategic collaboration to develop and integrate generative AI into healthcare by combining the scale and power of Azure OpenAI Service 1 with Epic’s industry-leading Electronic Health Record (EHR) software. This collaboration expands on a long-standing partnership, including enabling organizations to run Epic environments on the Microsoft Azure cloud platform. Joint innovations focus on delivering a comprehensive suite of AI-powered obstetric solutions integrated with Epic electronic health records to increase productivity, enhance patient care, and enhance the financial health of healthcare systems globally.
according to zacks Investment Research, based on forecasts by 16 analysts, contextual EPS forecast for the quarter is $2.22. Earnings per share were reported for the same quarter last year $2.22 with #3 (Catch) Stock rating. In the meantime according to tripartite Microsoft is likely to beat revenue and earnings forecasts. MSFT can report 0.8% higher revenue (+ 410 bucks m) f $2.25 Earnings per share in the third quarter 2023.
Technical review
# Microsoft, D1
The technology company’s share price in the first quarter registered a growth of more than 30% if counted from the low of January 2023 to the end of March, with the largest increase occurring in March above 15%. Prices in April tend to be lower than the August 2022 peak (294.17) and are traded within a defined range between 281.63 – 292.07. It could test the upward movement 294.17 Resistance and if there is a breakout against this price level, Microsoft price is expected 300.00 Round shape and FE100 (303.07) to 219.35-276.72 And 245.70 to retreat.
In the meantime, it moved below the minor support level at 281.63 Can come down to test support at 272.02 (52 day exponential moving average) or bullish trend line. The RSI has fallen out of the overbought area and is currently at 57, while the MACD is still confirming a bullish in the overbought area, only the histogram shows steady interest and is slightly lower. Better results may increase interest, while disappointing reports may dampen prices.
Meanwhile, there are a number of global investment banks and wealth management companies such as Stifel Nicholas Increase target price on Microsoft stock from $290.00 to $310.00 Rating “Buy” – Wedbush lift their target from $290.00 to $315.00 rated “Superior”. – Piper Sandler Increase your target price from $247.00 to $290.00 And he gave the rating “overweight” – Rosenblatt Securities Brokerage Lower your target price $285.00 to $275.00 And set the rating “Buy” – Raymond James raise the goal of $270.00 to $310.00 and gave the company a “Superior” rating. according to MarketBeatThe company currently has a “Moderate Buy” consensus rating and average price target $298.29.
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Eddie Fangisto
Market Analyst – HF Education Office – Indonesia
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