Is Microsoft Corporation (NASDAQ:MSFT) Stock Worth A Buy After Solid Earnings?

Many of the biggest stocks in the market have recorded declines this year due to the coronavirus pandemic, but the MSFT stock has been one of the few stocks to have actually gained in 2020 so far. Microsoft Corporation (NASDAQ:MSFT) recently announced its fiscal third-quarter results, and although the stock did not move, it seems the good performance had already been priced in.

Earnings Recap

Microsoft has gained 13% so far this year, and it could be worthwhile for investors to take a closer look at the stock. Revenues came in at $30.57 billion, and earnings hit $1.40 per share. Analysts had projected revenues of $35.02 billion and earnings per share of $1.26.

The company has projected that its revenues for the ongoing quarter are going to be in the $35.85 billion to $36.8 billion range. While the coronavirus pandemic may have wreaked havoc on the global economy and on markets, it only had a minuscule impact on Microsoft. The company withdrew its projections for its personal computing business, but in the end, it recorded a year on year rise of 3% to hit $11 billion in Q3 and also beat analysts’ estimates.

On the other hand, the company’s cloud business remains one of the secret weapons for Microsoft going forward.  It remains one of the secret weapons for Microsoft going forward.

The cloud business recorded growth of as much as 27% year on year and recorded $12.28 billion in revenues. On top of that, the Azure hosting platform managed to register growth to the tune of as much as 59%. The Productivity and Business Solutions arm of the cloud business also recorded significant growth of 15% and recorded revenues of as much as $11.7 billion.

The company said that there might be pressure in terms of earnings from small to medium-sized customers, and revenues from LinkedIn might also suffer. However, the diversification of the company’s business means that the stock could still be a good long term play.

About Travis Garlick 1822 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.