The world’s top software company has not been immune to the 2022 sell-off and bear market. Despite its remarkable financial strength, resiliency, and bright future prospects, Microsoft stock ( NASDAQ:MSFT ) has sold off more than the S&P 500, albeit it is slightly ahead of the NASDAQ year to date.
While recent stock performance has been dismal, pushing Microsoft stock from an all-time high to a multi-year low, the company’s core fundamentals have never been stronger. Of course, there are some macroeconomic issues, but where else would you put your money? In overpriced speculative names or well-established firms with outstanding fundamentals and fantastic prospects?
Prospects for Growth and Long-Term Business Lines
Microsoft’s most essential solutions have transitioned from discs and single purchases to a SAAS model. This is not only more efficient and profitable, but it also simplifies client decisions and lives.
Microsoft is constantly evolving. The company and its management have proven to be not just professional but also forward-thinking in areas ranging from operating systems to business software packages and games.
Aside from these traditional revenue streams, Microsoft has grown its cloud computing service, Azure, into an industry leader. Microsoft’s cloud computing solutions, including Azure, accounted for approximately half of the total revenue in the fiscal quarter ending June 30, 2022, and are expanding at a rate of more than 30% per year with gross margins of 70%. Except for Xbox content and services and Office Commercial Products, all lines of business have grown by double digits. The stronger currency partly exacerbated the income decline, but it would have been negative regardless.
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