Microsoft stock forecast and earnings
To start with a Microsoft stock forecast, most people usually think of their Windows computers, the Microsoft Office suite, or maybe the Internet Explorer browser. While these are certainly big parts of Microsoft’s business, I’m not sure most people realize how huge Microsoft’s business is. Once you start listing the things Microsoft owns, the list seems to continue. For example, Microsoft owns:
- Azure cloud computing
- Skype (which has since been integrated with Microsoft Teams)
- Microsoft Surface
- Microsoft Office 365
Almost all of these industries could easily be self-sufficient and competitive within their industries. For example, LinkedIn is one of the biggest social media sites on the Internet. Xbox is one of the most popular gaming systems. Hololens is at the forefront of virtual and augmented reality.
Here are some VR stocks and video game stocks to consider investing in as well.
No wonder Microsoft has such a high standard mission declaration. Microsoft’s mission is to “empower every person and organization on the planet to do more.Talk about setting the bar high (as well as somewhat vague).
To its credit, Microsoft has definitely produced results to defend statements like this. In 2021, Microsoft’s technology aid billions of people around the world. He helped NASA conduct research on Mars. This helped Anheuser Busch use real-time information to brew beer more efficiently. He has also helped hundreds of businesses bypass the catastrophic blockade of the Suez Canal. That doesn’t even take into account the billions of people who use its hardware or office suite.
Microsoft is currently one of the few trillion dollar companies in the world. So does that mean Microsoft stock is one of the few must-have stocks in your portfolio?
Let’s take a look at a Microsoft stock forecast and find out.
Microsoft Stock Forecasts
Microsoft is expected to announce the third quarter results after market close today October 26, 2021.
To note: I am not a financial advisor and simply offer my own research and commentary. Please exercise due diligence before making any investment decisions.
What is Microsoft doing?
As mentioned, Microsoft is involved in a ton of different businesses. Microsoft is best described as a technology company that provides software, consumer electronics, personal computers, and related services. It employs 181,000 people, most of whom live in the United States.
Here are the different industries that Microsoft described in its most recent Annual Report:
- Applications and infrastructures
- Data and artificial intelligence
- development tools
- Power platform
- Commercial applications
- Modern work
A thorough analysis of all of Microsoft’s business could possibly fill a book. In fact, Microsoft has so many new projects going on that it took 16 page report (single spacing) just to announce them. One of the reasons Microsoft has so many new projects is that it spent about $ 20 billion in research and development each year.
For reference, Uber (which is not a small business) generated total revenue of around $ 10 billion in 2020. This means Microsoft casually spends double Uber’s total revenue. in 2020 only for research. This number was second for software companies, only behind Google.
Microsoft’s recent announcements
A full list of recent announcements for this Microsoft stock forecast can take days to read. For this reason, I have drawn some of the main highlights:
- Metaverse – Microsoft is considered one of the major companies contributing to the metaverse. If you haven’t heard of the Metaverse, it’s a future version of the internet. The metaverse will combine virtual reality, augmented reality and digital worlds. For more on this, check out these Metaverse Actions.
- LinkedIn leaves China – Microsoft is pulling LinkedIn from China after struggling to comply with the Chinese government.
- Microsoft for startups – A startup incubator under construction. This project will seek to give more opportunities to entrepreneurs.
With so many projects going on, let’s see how much money Microsoft is actually making.
MSFT Share Price Forecast
In fiscal 2021, Microsoft reported revenue of $ 168 billion, an increase of 18% from 2020. Its revenue has grown on average by about 13% per year over the past five years. last years.
In 2021, Microsoft reported $ 61 billion in net income. This was an increase of almost 40% from 2020. If he advertised a one-time bonus for his employees using those profits alone, the 181,000 employees would receive a check for $ 337,000.
Microsoft also announced a net profit margin of 36% in 2021. That’s incredibly impressive for a company of its size. Additionally, Microsoft’s and LinkedIn’s security activities both exceeded $ 10 billion in annual revenue in 2021.
Microsoft stocks reacted appropriately to these numbers. Its stock has grown 42% so far in 2021 and has grown by over 400% in the past five years. Since 2010, Microsoft stock is up about 900%.
With that said, let’s take a look at the most important question: should you buy Microsoft stock?
Should I buy Microsoft shares? Potential Benefits
It’s pretty clear that Microsoft’s stock has been unstoppable over the past few years. The company has been a money-printing machine that made more profit in fiscal 2021 than most companies will ever make. Its activity is also so diverse that the management team must have difficulty finding new businesses. On the Robinhood trading app, Microsoft has a “buy” rating from 95% of investors.
The chart of Microsoft stocks over the past five years is also everything an investor could dream of. Microsoft stock has grown just over 400% in five years, or 80% per year. Just a reminder that the average annual return of the stock market is around 10%. To see how investments can grow, check out our free investment calculator.
Even if Microsoft stock continues to reach half its success over the next five years, it could quadruple the market’s return. However, we know that a stock’s past results are not always a good predictor of its future performance.
That said, let’s take a look at a few issues that could go wrong for Microsoft in the future. The risk is important to factor in this Microsoft stock forecast.
Should I buy Microsoft shares? Potential drawbacks
Whenever a business (or action) is so successful, it means that expectations tend to be very high. In the future, anything less than stellar will disappoint investors. For example, Microsoft increased its net profit by 40% in fiscal year 2021. Due to its size, conventional wisdom says that it will not be able to do this consistently in 2022, 2023, etc. .
Failure to meet Wall Street’s sky-high expectations could result in a short-term correction in the share price. Investors who buy Microsoft shares are now at risk of buying just ahead of a possible correction. That said, it’s unclear when (or if) this will happen.
Also, we cannot talk about Microsoft without talking about the will of Congress to regulate big tech. On the one hand, no significant regulations on major technologies have ever been applied. However, the threat of regulation will always be a threat to investors. A piece of recent legislation could prohibit companies from promoting their own products in their own marketplaces. It would be more damaging for tech companies that own markets like Amazon, Facebook, and Google. However, it is not clear what kind of legislation might be proposed in the future.
In the worst case, Microsoft could be seen as monopolistic. It could then be forced to sell certain sectors of activity, which could adversely affect its results. Even the announcement of regulations could result in a massive sell-off of Microsoft shares in the short term.
Hope you have found these Microsoft Stock Predictions helpful in deciding whether or not to invest in Microsoft stocks. As usual, all investment decisions should be based on your own due diligence and tolerance for risk.
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About Teddy Stavetski
A graduate of the University of Miami, Teddy studied marketing and finance while playing for four years on the soccer team. He has always had a passion for business and used his experience from a few personal projects to become one of the top rated business copywriters on Fiverr.com. When he’s not hammering out words on paper, you may find him hammering notes on the piano or walking to a random place.