Is Microsoft Stock a buy ahead of the software giant’s September report?


Software giant Microsoft (MSFT) received praise for its successful transition from desktop computing to cloud computing. And MSFT stock has risen accordingly. Many investors may be wondering: Are Microsoft stocks a buy right now?


Bill Gates and Paul Allen started Microsoft in 1975 at the dawn of the personal computer era to create PC operating system software. The company’s Windows operating system has come to dominate the PC landscape. Microsoft has grown over the years into productivity software, server software, Internet services, video games, and PC hardware and accessories.

Current CEO Satya Nadella took over the reins of the Redmond, Wash., Based company in 2014 and led Microsoft to full force in cloud computing.

The company’s cloud offerings today include Azure infrastructure services, Office 365 productivity software, and Dynamics business software. Microsoft also owns LinkedIn, Skype, and GitHub.

MSFT Stock News: Price Rise

On August 19, Microsoft announced the first price increases for its Microsoft 365 and Office 365 commercial cloud product suites. Microsoft stock jumped 4.7% over two days on the news.

On July 14, Microsoft unveiled Windows 365, a service that transfers its Windows operating system to the cloud. The sales department delivers the entire Windows experience, including apps, data, and settings, to PCs and other devices. It is also creating a new category of hybrid personal computing called Cloud PC, the company said. MSFT stock rose 0.5% that day.

On June 24, Microsoft presented its Windows 11 personal computer operating system. Microsoft shares rose 0.5% on the news. Windows 11 is scheduled for release on October 5.

Windows 11 features a refreshed design with a new user interface and a Start menu. It also provides PC performance improvements and integrates the Teams video conferencing app. Windows 11 is the successor to Windows 10, released in July 2015. Windows 11 will be available this holiday season.

In other recent news, Microsoft announced an agreement to buy Nuance Communications (NUAN) for $ 19.7 billion on April 12. acquisition of Nuance will give Microsoft more weight in the health sector. Microsoft shares rose a fraction on the news.

And, on March 31, Microsoft was awarded a contract to supply more than 120,000 Microsoft HoloLens augmented reality headsets in the US military. The contract is part of the Integrated Visual Augmentation System (IVAS) program. The deal could be worth up to $ 21.88 billion over 10 years. MSFT stock was up 1.7% on the report.

Microsoft follows Amazon in cloud computing

On July 6, the US Department of Defense canceled a major cloud computing contract which he attributed to Microsoft in October 2019. Microsoft beat the favorite (AMZN) to win the contract known as JEDI, or Joint Enterprise Defense Infrastructure. But Amazon has challenged the award of the $ 10 billion contract in court and delayed its implementation.

The Pentagon now plans to open up a new contract, the Joint Warfighter Cloud Capability, to competition. The agency said it would solicit bids from Amazon and Microsoft for the contract.

Meanwhile, Microsoft is protesting the award of a $ 10 billion cloud contract to Amazon by the United States National Security Agency. This NSA contract is codenamed WildAndStormy, according to media reports. Microsoft filed an administrative protest through the Government Accountability Office over the contract.

Amazon Web Services from is the world’s largest provider of cloud infrastructure services. In the second quarter, AWS held a 31% market share, according to research firm Canalys. Microsoft was in second place with 22% market share.

Other major cloud players include Alphabet (GOOGL) the Google Cloud Platform unit, as well as China Ali Baba (BABA) and Tencent (TCEHY). Overall business spending on cloud infrastructure services reached $ 47 billion in the second quarter, up 36% year-over-year, Canalys said.

February 24, Microsoft announced three new industry-specific cloud offerings. They included versions of Microsoft Cloud for financial services, manufacturing, and nonprofits. He also previewed a retail version. In addition, he provided the first update of Microsoft Cloud for Healthcare. Microsoft shares rose 0.6% on the announcement.

Fundamental analysis of Microsoft stocks

End of July 27, Microsoft delivered a beat-and-raise report for its fourth fiscal quarter ended June 30. But Microsoft stock edged down 0.1% on the next day’s news.

Microsoft earned $ 2.17 a share on sales of $ 46.2 billion in the June quarter. Analysts had predicted Microsoft earnings of $ 1.92 per share on sales of $ 44.2 billion. Year over year, Microsoft’s profits grew 49% while sales increased 21%.

The report marked the fourth consecutive quarter of accelerating sales and profit growth for Microsoft.

For the September quarter, Microsoft expects to generate revenue of $ 43.75 billion, up 18% from the same period last year. It’s based on the midpoint of its orientation. Wall Street had predicted $ 42.5 billion in sales for Microsoft’s first fiscal quarter.

Microsoft plans to release its first quarter financial results in late October. This could be the next catalyst for MSFT stocks.

Microsoft has benefited from the trends of working from home and home learning during the Covid-19 pandemic. The trends have spurred an increase in PC purchases. In addition, Microsoft’s cloud software and services help home workers and students.

Technical analysis of the MSFT share

On June 21, Microsoft stock reached a point of purchase from 263.29 on one cup bottom, according to IBD MarketSmith graphics. He climbed to 263.52 before retreating. Microsoft stock closed the regular session that day at 262.63, just below its buy point.

On June 22, the MSFT share entered the shopping area and reached a market capitalization of $ 2,000 billion. This is the second company after Apple (AAPL) to achieve this milestone.

Microsoft stock hit an intraday high 305.84 on August 20.

Microsoft stock has a good IBD Relative Strength Rating 79 out of 99. The best growth stocks generally have an RS rating of at least 80. The relative strength rating shows how a stock’s price performance has compared to all other stocks over the past 52 weeks.

The IBD Inventory Check the tool gives the MSFT stock a IBD Composite Rating out of 95 out of 99. IBD’s Composite Scoring combines five distinct proprietary ratings into one easy-to-use number. The best growth stocks have a composite rating of 90 or better.

Microsoft ranks first out of eight shares in the IBD Computer Software-Desktop group. The desktop software group ranks 53rd out of 197 industry groups followed by IBD. Choosing well-rated stocks from major industry groups in a confirmed uptrend in the stock market generally increases your chances of making profits on growth stocks.

Microsoft stock is on IBD Ranking listing. It is also in the EIA Long-Term Leaders Portfolio.

Is Microsoft Stock Buy It Now?

Microsoft stock is not a purchase at this time. However, he formed a flat base with a buy point of 305.94, according to charts from MarketSmith. The MSFT action closed the ordinary session on October 1 at 289.10.

But Microsoft stock has a IBD Accumulation / Distribution Rating of D-. The rating, on a scale from A + to E, measures institutional purchases and sales of a stock over the past 13 weeks. A + means large institutional purchases and E means large sales. The AC rating is average.

Keep an eye on global stock market. If the market turns south, don’t try to fight the general direction of the stock market.

To find the best stocks to buy or watch, to verify IBD Inventory Lists. Also consult the IBDs Ranking, Smith Market and SwingTrader platforms.

Follow Patrick Seitz on Twitter on @IBD_PSeitz for more articles on consumer technology, software, and semiconductor stocks.


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