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Microsoft Stock: Room for Growth after Recent Highs?

Stock MarketsAug 31, 2021 03:31PM ET
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© Reuters. Microsoft Stock: Room for Growth after Recent Highs?

Microsoft’s (MSFT) latest quarterly results impressed even the harshest skeptic. Moreover, management has provided robust guidance for the rest of the fiscal year.

Accordingly, MSFT stock has continued to soar, breaching the $300 mark for the first time ever in recent trading days. I am bullish on the stock. (See MSFT stock charts on TipRanks)

This momentum is well-deserved. Microsoft (NASDAQ:MSFT) Azure and Office365 have been performing exceptionally well. Azure has overtaken Amazon’s (AMZN) AWS, and is poised for long-term growth. Office 365 has been growing at a double-digit rate and has accounted for 26% of the company's revenue. 

On top of that, Microsoft has a number of high-value deals and contracts in the pipeline, which will assist in its continued growth. Thus, there are various factors that can drive Microsoft shares higher in the coming days.

With a market cap of $2.3 trillion, impressive growth potential, and major developments, MSFT cannot be ignored. 

Let’s find out whether it would be wise to dive into MSFT stock at this point.

Major Recent Developments to Boost MSFT 

Microsoft has landed a 10-year, $21.9-billion deal with the U.S. Army to provide Integrated Visual Augmentation System headsets. These IVAS headsets would be used by combat personnel. 

In addition, the company has also grabbed a $2-billion deal with AT&T (NYSE:T). With this deal, AT&T will be moving most of its non-network operations onto Azure. The telecommunications company will also be using Office 365 products.

The company is also focusing on expansion through acquisitions. It has recently closed a deal to acquire ZeniMax Media. This $7.5-billion cash deal is expected to help Microsoft increase its video game business substantially.

Impressive Quarterly Results 

As per the latest quarterly report released in July, Microsoft registered revenue of $46.2 billion. This is a 21% increase on a year-over-year basis. The Productivity and Business Processes revenue has seen a jump of 15%.

The revenue of the company's Intelligent Cloud segment also soared 30% to $17.4 billion. Notably, Microsoft Azure revenue scaled a massive 51% jump. These are the key growth drivers to which investors are paying closest attention.

Wall Street's Take

According to the rating consensus among TipRanks analysts, Microsoft stock comes in as a Strong Buy. Out of 25 analyst ratings, there are 25 Buy recommendations.

The average price target for MSFT stock is $326.92. This price target ranges from a low of $275 to a high of $411 for each share.

Bottom Line

Microsoft’s market share is increasing in various segments. Revenue growth from Azure and Office 365 are seeing significant increases. In addition, analysts unanimously like the stock.

Considering the above mentioned aspects, investors interested in buying MSFT are good to go. 

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Microsoft Stock: Room for Growth after Recent Highs?
 

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