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Valued at a market cap of $3.4 trillion, Microsoft Corporation (MSFT) is a global technology leader that develops, licenses, and supports a wide range of software products, services, and devices. The Redmond, Washington-based company is a major player in artificial intelligence, enterprise software, cybersecurity, and digital transformation services.
Companies valued at $200 billion or more are typically classified as “mega-cap stocks,” and Microsoft fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the software - infrastructure industry. The company’s core strengths lie in its diversified product ecosystem, global brand reputation, and dominance in enterprise software and cloud computing. It leads the market with widely used platforms like Windows, Office 365, Teams, and Azure, which are deeply integrated into business and consumer operations worldwide. Microsoft’s strong financial position, consistent innovation, and strategic acquisitions, including LinkedIn, GitHub, and Activision Blizzard, further enhance its capabilities across productivity, developer tools, social networking, and gaming.
This tech giant is currently trading 1.6% below its 52-week high of $468.35, reached on Jul. 5, 2024. MSFT has gained 17.4% over the past three months, outperforming iShares Expanded Tech-Software Sector ETF’s (IGV) 7.8% rise during the same time frame.
Moreover, on a YTD basis, shares of MSFT are up 9.3%, compared to IGV’s 3.7% uptick over the same time frame. However, in the longer term, Microsoft has gained 7.1% over the past 52 weeks, lagging behind IGV’s 25.2% return.
To confirm its recent bullish trend, MSFT has been trading above its 200-day moving average since early May and has remained above its 50-day moving average since late April.
On Apr. 30, Microsoft delivered better-than-expected Q3 results, prompting its share price to surge 7.6% in the following trading session. The company posted revenue of $70.1 billion, which rose 13.3% from the year-ago quarter and exceeded analyst expectations by 2.5%. Moreover, its net income per share advanced 17.7% year-over-year to $3.46 and came in 8.1% above the consensus estimates. This strong performance was driven by robust growth in revenue across all its reportable segments, with the Intelligent Cloud division standing out with a 20.8% year-over-year increase. Additionally, its operating income grew 16% year over year to $32 billion, underscoring Microsoft’s strong profitability and operational efficiency.
Microsoft has lagged behind its rival, Oracle Corporation’s (ORCL) 31.7% rise over the past 52 weeks. However, it has outpaced ORCL’s 2.8% decline on a YTD basis.
Looking at MSFT’s recent outperformance, analysts remain highly optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 46 analysts covering it, and the mean price target of $513.60 suggests an 11.5% premium to its current levels.
