Microsoft (NASDAQ:MSFT) Poised For More Gains Due To Solid Performance Of Azure AndTeams

Microsoft Corp (NASDAQ:MSFT) has demonstrated significant strength amid the coronavirus pandemic. The company’s earnings release last month indicated that the company’s cloud segment has been growing which is a good indicator for the stock as it nears previous highs.

Despite the impact of the coronavirus, Microsoft posted better earnings

This is one of the stocks expected to move higher once markets rebound. Although there might be some uncertainty the valuation of Microsoft is reasonable and it is its underlying strength. With movement restrictions and lockdowns due to the pandemic a lot of people are working remotely and they are using the company’s applications like Office 365, Skype, and Microsoft Teams. The Microsoft Teams has massive potential and could help boost growth in the long-term.

The thesis for Microsoft is that it is a tech stock and uncertainty in the industry may be limited. Despite the coronavirus pandemic the company’s earnings for the recent quarter were impacted minimally. Its overall revenue grew 15% with YoY EPS jumping 23%. Revenue from its business segments increased significantly with Azure cloud growing 59% from the previous year while Office 365 revenue grew 25%.

Microsoft Teams platform showing massive growth

Most importantly the company’s Teams platform is at par with Zoom Video (NASDAQ:ZM) and Slack Technologies (NYSE:WORK) and it competing with the platforms favorably. The Teams platform has been growing significantly and in the first quarter it saw a 70% surge in Daily Active Users from the previous quarter. Currently around 75 million users are using Microsoft Teams. 

Before the coronavirus induced selloff Microsoft was performing strongly thanks to its Azure cloud segment and associated platforms. Its stock has surged from $120 in April last year to around $190 in February this year. even with the March dip, Microsoft shares were still reasonably priced and has since recovered to just below their highs and there is potential for even more gains.

About Travis Garlick 1765 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.