Microsoft explodes with profits and the capitalization immediately exceeds 1.000 billion, overtaking Amazon and Apple. The stock of the American IT giant closed the week on Wall Street consolidating its capitalization well over a trillion dollars (at 1.047 billion), a value with which it further leaves Amazon (967,2 billion) and Apple (first in the August 2018 had reached the milestone of one thousand billion and is now worth 932,13 billion).
In the aftermath of accounts with never-higher quarterly revenues, analysts rushed to raise their respective target prices for the stock. Not by chance. Microsoft presented a record year with 39,2 billion dollars of profits (+137%) and revenues to 125,8 billion (+14%). In the three months ended June 30, 2019, it posted net income of $13,2 billion, up 49% from the same period in 2018. Earnings per share were up 50% for the year. And Chief Financial Officer Amy Hood said in Friday's call that she expects double-digit sales increases in the new fiscal year as well. And so Citigroup raised the target price of the Microsoft stock to 152 from 147 dollars, leaving the recommendation at "neutral". For Canaccord Genuity, the share must be bought because it will reach 155 dollars, not just 145 anymore.
The analysts of BMO Capital are even more optimistic, according to which Microsoft will reach 160 dollars (from the 153 estimated so far). That's why they believe the stock will outperform its industry competitors (“Outperform”). In general, analysts were impressed by the performance of the group's cloud businesses, symbolized by the Azure brand.
Experts appreciated the agreement announced on July 17 between Microsoft and the American telecommunications giant AT&T, which represents the largest agreement regarding Azure so far signed. Although Amazon, with AWS, still dominates the cloud market, that agreement shows that the group famous for the Office package knows how to defend itself. According to press rumors, the agreement with AT&T is worth 2 billion dollars. Microsoft stock is up 37% year-to-date, up 20% on the S&P 500 and up 24% on the Nasdaq Composite.
