Microsoft reported yesterday the earnings for the quarter, which came better than consensus estimates The Revenue came in at $38 billion above the expectations of $35.5 billion. The Earnings per share reported at $1.46 per share, also above the consensus of $1.36 per share. The Intelligent Cloud sector revenues were at $13.4 billion above the forecasts of $13.1 billion expected a 17.4% increase.
The Azure cloud business revenue was up 47%, slowing slightly from the previous quarter. Xbox revenue rose 65%. Surface hardware revenue jumped 28%, while search advertising revenue declined 18%.
Despite the better quarterly report MSFT stock trading lower today as analysts expecting tough margins comparisons in the coming quarters between 2020 and 2021.
Microsoft capitalization now stands at 1.61 trillion, and the P/E ratio is at 36.14. The PEG ratio is at 2.47, while the Price to sales is at 11.27.
Microsoft Technical Analysis
Microsoft trades 2.13% lower at 207.30 giving up all of yesterday’s gains despite the better than expected earnings report. The stock corrected from the all-time highs that hit earlier in July, as the stock capitalized the high demand for its services during the coronavirus lockdown, The technical picture remains bullish despite the recent correction and any further pullback should be considered a buying opportunity.
On the downside, first support for MSFT stands at 202.59 the low from July 20. More bids might emerge at 195.45 the 50-day SMA. A move below will open the way for 184.07, the low from June 15.
On the other side, immediate resistance stands at 210.92 the daily low. If the stock breaks higher, then the next target is 213.52 the high from July 21. The all-time high at 216.38 is the next supply zone.
Microsoft Daily Chart