Microsoft Corp. (NASDAQ:MSFT), a diversified technology company, is leading the pack in the tech sector. Established in 1975 and headquartered in Redmond, Washington, Microsoft offers software, hardware, and cloud-based solutions to a wide range of customers, including enterprises and individuals. The company’s product lineup includes PCs, gaming devices, entertainment systems, and tablets.
Over the past 52 weeks, Microsoft stock has surged by 29%, with a 5% increase recorded in 2024 alone, propelling its market capitalization to an impressive $2.9 trillion, making it the world’s largest publicly traded company by this measure.
One of the driving forces behind Microsoft’s recent success is its focus on artificial intelligence (AI). The company has made significant investments in OpenAI, positioning itself at the forefront of the AI revolution in the tech industry.
In its fiscal third-quarter results released last week, Microsoft reported a 17% year-over-year revenue growth to $61.86 billion, surpassing market expectations of $60.80 billion. Earnings per share stood at $2.94, beating analysts’ forecasts of $2.82.
A significant contributor to Microsoft’s strong performance was its Azure cloud platform, which generated $26.71 billion in revenue, marking a 21% increase from the previous year and surpassing Wall Street’s estimate of $26.26 billion. The company attributed 7 percentage points of Azure’s growth to AI initiatives.
Looking ahead, Microsoft provided revenue guidance of $64 billion for the current quarter, slightly below analysts’ expectations of $64.50 billion.
Bill Gross, co-founder of Pacific Investment Management Co., recently endorsed Microsoft as a standout in the tech sector. While Gross typically favors value stocks over tech, he emphasized Microsoft’s strength, stating, “MSFT best in tech if you must.” He highlighted the company’s attractive valuation following its earnings report and its consistent dividend growth over the past 19 years, with the stock currently yielding 0.77%.
Analysts share Gross’s optimism, with a consensus “Strong Buy” rating and a mean price target of $470.26, implying a 19% upside potential from current levels. Of the 37 analysts covering Microsoft, 33 rate it as a “Strong Buy,” three as a “Moderate Buy,” and only one as a “Hold.”
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Author Stephanie Bédard-Châteauneuf 
