What Is Going on With Microsoft (MSFT) Stock Today?

  • The Street is bullish on Microsoft's (MSFT) full-year guidance, sparking a rally in MSFT stock.
  • The company expects its top line and operating income to surge by at least 10% during its current fiscal year.
  • Microsoft noted that its cloud revenue surged 28% year-over-year (YOY) last quarter.
MSFT stock - What Is Going on With Microsoft (MSFT) Stock Today?

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Microsoft (NASDAQ:MSFT) stock is rallying 5% today as investors and analysts were pleased with the company’s full-year guidance. Specifically, the tech giant predicted that its top line and operating income would jump by double-digit percentage levels during its current fiscal year.

For its fourth quarter of fiscal 2022, which ended in June, the tech giant reported earnings per share of $2.23, versus analysts’ average outlook of $2.16. The company’s revenue climbed 12% year-over-year (YOY) to $51.87 billion. However, that total was $490 million below analysts’ mean outlook.

“In a dynamic environment we saw strong demand, took share, and increased customer commitment to our cloud platform. Commercial bookings grew 25% and Microsoft Cloud revenue was $25 billion, up 28% year over year,” CFO Amy Hood stated.

On a negative note, foreign exchange fluctuations lowered the conglomerate’s top line by $460 million. Moreover, it estimated that China’s anti-Covid measures reduced its Windows revenue by $300 million.

MSFT Stock: Microsoft Guidance Pleases Analysts

But, noting that its cloud business continues to grow rapidly, Microsoft reiterated its previous guidance for its current fiscal year, which began on July 1. As noted earlier, that guidance calls for at least 10% YOY increases in its top line and operating income. Additionally, the company expects its margins to remain unchanged from FY22 during its current fiscal year.

Multiple analysts were pleased by the company’s guidance. Wedbush’s Dan Ives saw the forecast as a “major boost” for MSFT stock. He called the outlook “bullish.” Labeling the guidance “sound,” Evercore ISI’s Kirk Matern kept a $330 price target and an “outperform” rating on the shares. Finally, citing the strong growth of Microsoft’s cloud business last quarter, Goldman’s Kash Rangan remained upbeat on the firm’s fundamentals.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.


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