Microsoft faces setbacks due to software update, but analysts bullish on earnings growth and dividends

From Nasdaq: 2024-09-01 11:22:19

Microsoft, a $3 trillion-dollar tech giant, faced setbacks in July following a botched software update by CrowdStrike. Despite recent turbulence, analysts remain bullish, citing strong historical earnings growth and dividends. With a conference set to overhaul cybersecurity strategies, Microsoft aims to bounce back and solidify its position in the industry.

Microsoft stock has pulled back from summer highs, currently down 11.8% from July’s record price of $468.35. Recent mixed signals from Q4 earnings have contributed to the dip, leaving MSFT up just 10.9% YTD. With a forward P/E ratio of 31.35, the stock maintains a premium valuation among trillion-dollar tech peers.

In Q4, Microsoft exceeded earnings expectations, generating $64.7 billion in revenue – up 15.2% YoY. Azure AI services particularly shined, fueling cloud growth and solidifying customer loyalty. Analysts predict fiscal 2025 revenue of $279 billion, buoyed by AI and cloud ventures. With a strong record of dividends, Microsoft remains focused on rewarding investors.

Following the CrowdStrike disruption, Microsoft is set to host a cybersecurity conference to address vulnerabilities and prevent system-wide crashes in the future. Industry giants will aim to shift to safer application modes and explore memory-safe languages like Rust. Analysts maintain a “Strong Buy” rating on MSFT, with a mean price target of $499.58.



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