Riding on its software prowess, cloud computing, and AI, Microsoft Corp. (NASDAQ: MSFT) stock rallied 33.17% YTD. Microsoft-funded artificial intelligence company OpenAI will be the business version of ChatGPT. It would place the company in direct competition with Microsoft and rival its Bing Chat Enterprise.
Microsoft Corp. (MSFT Stock) – Is it Good for the Future?
2023 has been an excellent year for the technology sector, and greats of the field have reported substantial gains. Microsoft reported a strong profit margin of 34.15% during the latest earnings. Free cash flow gained 12% year-over-year (YoY) to $19.8 Billion. Looking at data from 2017 to 2023, revenue gained from $97 Billion to $212 Billion.
The AI market is expected to be around $2 Trillion by 2030, nearly 20 times its current value of $100 Billion. Companies like Microsoft, Google, and Anthropic should generate substantial profits. Microsoft is backing OpenAI and self-innovating in the AI space; leveraging AI in its verticles, the tech giant should gain a lot.
Microsoft Corp. (NASDAQ: MSFT) – Technical Analysis
MSFT stock, at press time, is trading at $323.70, gaining 0.22%; previous close and open were at $322.98 and $325.66, respectively. The 52-week range is from $213.43 to $366.78, suggesting a solid push could create new highs. With an average volume of 29.36 Million shares, the market cap is $2.045 Trillion.
The trailing twelve-month (TTM) price-to-earnings (P/E) ratio is 33.14, suggesting a slightly high-valued stock price. At the same time, the (TTM) earnings per share (EPS) is $9.69, hinting towards the company’s financial stability. Analysts placed a 2.86 rating for moderate buy and estimated a price target at $373.68 with a 15.4 upside.
Microsoft released Q2 earnings on July 25, 2023, where the reported revenue of $56.189 Billion surpassed the expected value of $55.485 Billion by 1.27%. The reported earnings of $2.69 per share also beat the estimated value of $2.551 per share by 5.46%. Despite these positive earnings, the MSFT stock price fell around 6.5% during earnings.
Compared to the previous quarter, the revenue jumped 8.34% while the earnings gained 20.63%. Microsoft will release Q3 earnings on October 25, 2023, where revenue is estimated to be $54.5 Billion and earnings to be $2.633. The (TTM) revenue is $211.91 Billion, and the (YoY) quarterly revenue growth is 8.30%.
Microsoft Corp. (MSFT Stock) – Candle Exploration
MSFT stock reported a significant drop from its 52-week high and is trading below 50 EMA. This downtrend might continue and the price might test the buying zone. Also, the buying zone is the gap created during the April 2023 earnings and the price acting might fill the gap.
However, the price can bounce off the buying zone, or 200 EMA, if, at the time, a solid bullish candle is formed. It should break the immediate resistance at $351.89 to rally and sustain around the selling zone. If the price action is strong enough, the next target could be $380.00.
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