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The Zacks Analyst Blog Highlights: Microsoft, Apple, Facebook, Amazon And Netflix

By Zacks Investment ResearchStock MarketsNov 29, 2018 09:01PM ET
The Zacks Analyst Blog Highlights: Microsoft, Apple, Facebook, Amazon And Netflix
By Zacks Investment Research   |  Nov 29, 2018 09:01PM ET
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For Immediate Release

Chicago, IL – November 30, 2018 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Microsoft (NASDAQ:MSFT) , Apple (NASDAQ:AAPL) , Facebook (NASDAQ:FB) , Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) .

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Here are highlights from Thursday’s Analyst Blog:

Here’s Why Microsoft (MSFT) Is a Better Buy Than FAANGs

Microsoft catapulted to the position of the world’s most valuable publicly traded company for a brief stint. The company trumped iPhone-maker Apple for the first time in eight years, per data from Bloomberg.

In August, Apple became the first U.S. company to hit the $1-trillion benchmark. However, since then it has lost 9.7% primarily due to rising concerns over iPhone demand. Moreover, increasing probability of tariff imposition by the Trump administration on all remaining Chinese imports, including iPhone, is concerning.

Meanwhile, Microsoft has remained relatively insulated from the recent stock market rout for tech stocks, particularly FAANGs. The group has collectively lost around $575 billion in market cap since the beginning of October. FAANG is the acronym for Facebook, Apple, Amazon, Netflix and Alphabet (NASDAQ:GOOGL) division Google.

Notably, Microsoft has returned 29.6% year to date, trailing Netflix and Amazon’s respective gains of 47.2% and 43.3%.

Microsoft’s momentum is expected to continue on strong prospects of Azure, expanding enterprise business and LinkedIn (NYSE:LNKD). Let’s take a closer look at the key factors.

Azure Taking Over Market Share

Azure has turned out to be Microsoft’s cash cow. Per the latest Synergy Research data, cloud computing service has gained the maximum market share in the last four quarters, beating Amazon Web Services (AWS), Google Cloud and others.

In the last-reported quarter, Azure's revenues soared 76% at constant currency (cc) on a year-over-year basis. Expanding new capabilities with focus on existing workloads like security and new workloads such as Internet of Things (IoT) and Edge AI is helping Azure win new customers rapidly.

Moreover, Microsoft is gaining ground in government departments, intensifying competition against AWS, which recently rolled out its second isolated infrastructure region for government agencies and the organizations in highly regulated industries.

Enterprise Business Spreads Out

Enterprise business is expanding on solid adoption of Microsoft 365, Teams, Office 365 and Dynamics 365 solutions. Revenues at Productivity & Business Processes, which includes the Office and Dynamics CRM, have increased 18% at cc on a year-over-year basis to $9.77 billion in the last-reported quarter.

Microsoft is adding features that are making the solutions more enterprise oriented. Apart from strengthening cybersecurity features of Microsoft 365, the company has infused new AI-driven features, including automated slide design, Cortana reminders, enhanced search experiences and real-time meeting transcription, among others. These are expected to expand install base.

Moreover, Microsoft Teams is now used by roughly 329,000 organizations, including 87 of the Fortune 100. The company is adding automated translation support for meetings, shift scheduling for firstline workers, and new industry-specific offerings for healthcare and small businesses.

Further, the acquisitions of Semantic Machines, Bonsai, Lobe buyouts, GitHub, FSLogix and XOXCO are expected to strengthen Microsoft’s domain expertise.

LinkedIn: A Surprise Package

LinkedIn is growing faster than anticipated. Revenues surged 33% from the year-ago quarter to $1.46 billion, while sessions were up 34%, reflecting acceleration in engagement.

The acquisition of helped the platform host a diverse set of courses. Further, LinkedIn recently announced plans to acquire a startup, Glint, which offers Employee Engagement, Team Effectiveness, Employee Lifecycle and Manager Effectiveness solutions.

Reportedly, LinkedIn is now testing a new feature called “Student Voices,” to boost engagement, particularly among college goers and recent graduates.

Microsoft a Solid Buy

Microsoft currently has a Growth Style Score of B and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with a Growth Style Score of A or B when combined with a Zacks Rank #1 or 2 offer good investment opportunities.

Over the last 60 days, the Zacks Consensus Estimate for its fiscal 2019 earnings has increased 4% to $4.43, reflecting year-over-year growth of 14.2%.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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Zacks Investment Research

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.

Netflix, Inc. (NFLX): Free Stock Analysis Report, Inc. (AMZN): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

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The Zacks Analyst Blog Highlights: Microsoft, Apple, Facebook, Amazon And Netflix

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The Zacks Analyst Blog Highlights: Microsoft, Apple, Facebook, Amazon And Netflix

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