KyleLennon
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Microsoft declined 5% in yesterday’s trading, to below $90 per share. Is this a good buying opportunity?
The equity selloff among the top technology companies was instigated by Trumps's recent political announcement regarding tariffs on foreign goods. The magnitude of the impact is $60 billion tariffs on Chinese imports. The worst hit industries will be tech hardware and machinery.
Beijing reacted by announcing its target--128 US projects which have an import value of $3 billion. This resulted in a 6% decline for the IT Sector.
But Microsoft has a lot of things going for it.
The recent increase in the company's margins has resulted from the adoption of Azure, Microsoft’s public cloud, more profitable channel distribution, and an ever-growing customer base. The hope is that Microsoft will have a $50 Billion EBIT by mid-2019.
The firm anticipates doubling of the public cloud market to $230B by 2020. Morgan Stanley thinks Microsoft will hit a $1 Trillion market cap in the upcoming year.
Such a rally over the course of this and next year would make MSFT go from the third largest public enterprise (only Apple and Alphabet and larger judging by market capitalization) to the largest one.
Per Finstead Research, Microsoft has an average price target of almost $104. Its price upside is almost 14%.
Microsoft’s valuation is fairly high among its peers (based on the forward P/E ratio), lagging only ADBE, RHT, and CRM.
How do you think?
The equity selloff among the top technology companies was instigated by Trumps's recent political announcement regarding tariffs on foreign goods. The magnitude of the impact is $60 billion tariffs on Chinese imports. The worst hit industries will be tech hardware and machinery.
Beijing reacted by announcing its target--128 US projects which have an import value of $3 billion. This resulted in a 6% decline for the IT Sector.
But Microsoft has a lot of things going for it.
The recent increase in the company's margins has resulted from the adoption of Azure, Microsoft’s public cloud, more profitable channel distribution, and an ever-growing customer base. The hope is that Microsoft will have a $50 Billion EBIT by mid-2019.
The firm anticipates doubling of the public cloud market to $230B by 2020. Morgan Stanley thinks Microsoft will hit a $1 Trillion market cap in the upcoming year.
Such a rally over the course of this and next year would make MSFT go from the third largest public enterprise (only Apple and Alphabet and larger judging by market capitalization) to the largest one.
Per Finstead Research, Microsoft has an average price target of almost $104. Its price upside is almost 14%.
Microsoft’s valuation is fairly high among its peers (based on the forward P/E ratio), lagging only ADBE, RHT, and CRM.
How do you think?
