Microsoft stock drops despite beating earnings, weak guidance and high valuation raise concerns
From Nasdaq: 2024-11-06 07:09:00
Microsoft (NASDAQ: MSFT) stock dropped despite beating expectations in its first-quarter fiscal year 2025 results. The company reported earnings of $3.30 per share, exceeding analysts’ expectations of $3.10, with 16% revenue growth. However, Microsoft’s weak guidance for the next quarter and a forward P/E of 31.5 raise concerns among investors.
Comparing Microsoft to its peers like Apple, Amazon, Alphabet, and Meta Platforms shows that it is one of the most expensive big tech stocks with lackluster growth. Analysts expect Microsoft to have 14% revenue growth and 10% EPS growth for FY 2025. Investors may want to consider cheaper options like Alphabet, Meta Platforms, or Amazon for better returns.
The Motley Fool Stock Advisor team doesn’t include Microsoft in their 10 best stocks for investors to buy now. They highlight stocks that could provide significant returns, with historical examples like Nvidia. Stock Advisor offers a blueprint for success, regular analyst updates, and two new stock picks each month, outperforming the S&P 500 since 2002.
Board members of The Motley Fool have positions in Alphabet, Amazon, and Meta Platforms, and the company recommends stocks like Microsoft, Apple, Amazon, Alphabet, and Nvidia. Investors should consider the potential of other big tech companies over Microsoft, especially given its premium valuation and modest growth prospects for the future. 1. The stock market reached record highs today, with the S&P 500 and Nasdaq both closing at all-time highs. The Dow Jones Industrial Average also saw significant gains, rising over 200 points. This surge is attributed to positive economic data and optimism surrounding a potential trade deal with China.
2. In other news, the unemployment rate has fallen to a 50-year low of 3.5%, according to the latest data from the Bureau of Labor Statistics. This marks a significant milestone in the strong job market, with employers adding 136,000 jobs in September.
3. Apple announced the launch of its highly anticipated streaming service, Apple TV+, which will feature original content from renowned filmmakers and actors. The service will be available for $4.99 per month, significantly undercutting competitors like Netflix and Disney+.
4. Climate activists around the world participated in a global climate strike, demanding urgent action to address climate change. Millions of people took to the streets in cities across the globe, calling on leaders to take bold steps to reduce carbon emissions and protect the environment for future generations.
Read more at Nasdaq: 1 Warning Sign That Could Send Microsoft Stock Down Further