Focus turns to Microsoft results as company becomes Wall Street’s largest
Microsoft (MSFT) reports its Q2 results after Wall Street’s closing bell on 30 January, 2024. We preview what to expect from the results and analyse the stock’s technicals.
Investors search for signs Microsoft is monetising AI hype
Microsoft regained the title of Wall Street’s most valuable company as its share price rose to all-time highs and its market capitalisation exceeded $3 trillion. The move comes as investors back the company as the market’s leader in artificial intelligence, courtesy (in large part) due to its acquisition of a significant share of OpenAI.
Investors will watch Microsoft’s Q2 results for signs that it is executing its AI strategy and monetising the hype surrounding the burgeoning technology. Analysts forecast a nearly 20% rise in EPS from a year earlier to $2.77 per share on a lift in revenues to $61.12 billion.
(Source: NASDAQ) Past performance is not a reliable indicator of future results.
The markets will focus on Microsoft's Azure cloud business as its primary growth engine and barometer for the success of its AI offering. Revenue for the segment is tipped to rise 17.5% to $25.29 billion, with operating margins expected to expand as the company rolls through its cost-optimisation program.
The analyst community is almost universally bullish on Microsoft shares. 60 out of 65 brokers have a buy recommendation on the stocks, and the consensus price target, at $429.84, is a premium to current market valuations.
Microsoft shares push to all-time highs
The technicals for Microsoft shares are very bullish, with the stock making fresh all-time highs recently. The weekly RSI is in overbought territory. However, momentum remains skewed to the upside. Previous pushes above 80 on the weekly RSI have signalled consolidation rather than a deeper pullback. Technical support is around $380 per share, with a deeper support zone between $350 and $360. Dip buyers have also emerged on sell-offs below the 20-day MA.
Past performance is not a reliable indicator of future results.