Microsoft Shares Hit All-Time Highs After Strong Quarterly Report

Microsoft Video 27.01.21.

Strong Results Push Microsoft Stock To New Highs

Microsoft reported its quarterly earnings yesterday after the market close. The company reported revenue of $43.08 billion and GAAP earnings of $2.03 per share, beating analyst estimates on both earnings and revenue.

The strong performance was driven by continued Azure growth, although other segments have also shown healthy increases in revenue. In addition, Microsoft provided strong guidance for the next quarter.

Microsoft CEO Satya Nadella commented: “What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry”. Judging by the company’s strong results, the company found ways to profit from this transformation.

Not surprisingly, analysts rushed to increase their price targets for Microsoft stock in order to reflect the recent performance. As a result, the stock attracted plenty of buyers during a challenging day for the market, and Microsoft shares tested all-time high levels.

Microsoft’s Report Shows That Big Tech Is Still Very Attractive

Worries about increased regulation for Big Tech companies have failed to curb investor enthusiasm as investors’ money continues to flow into the segment.

Microsoft’s report highlighted the main reason for this enthusiasm – Big Tech companies are well-equipped to thrive in the world disrupted by the pandemic.  Various Microsoft’s business segments showed solid growth as the company found numerous ways to benefit from increased demand in the digital space.

While the stock is trading at more than 30 forward P/E, such valuation looks like the new normal for market leaders at the time of unprecedented support from governments and central banks.

In addition, the dominance of passive investing via funds is providing additional support to big stocks like Microsoft which have a big weight in the S&P 500 index.

In this light, Microsoft shares have good chances to continue their upside move as investors continue to search for any growth opportunity in the current market.

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