Microsoft Stock Carves Record High On June-Quarter Earnings Beat

Microsoft stock surged to an all-time high on Friday after the software leader posted better-than-expected fiscal fourth-quarter results and guided higher for the current quarter.


Microsoft (MSFT) shares rose 2.9%, near 107.40, in morning trading on the stock market today. In intraday trading, Microsoft stock notched a record high of 108.20.

The company’s stock broke out of a six-week flat base at a buy point of 97.34 on April 27.

At least 13 Wall Street firms raised their price targets on Microsoft stock after the company’s earnings report late Thursday. The most bullish of the bunch was Bank of America Merrill Lynch, which upped its target to 134 from 130.

Double-Digit Growth Sustainable

Bank of America analyst Kash Rangan reiterated his buy rating on Microsoft. He sees “multiple positives” from the earnings report. Rangan believes Microsoft can deliver sustained double-digit growth in revenue, earnings per share and free cash flow long term.

Microsoft earned an adjusted $ 1.13 a share on sales of $ 30.1 billion in the June quarter. Analysts expected it to earn $ 1.08 a share on sales of $ 29.21 billion.

For the current quarter, it expects revenue of $ 27.7 billion, based on the midpoint of guidance. Analysts were modeling $ 27.4 billion.

The Redmond, Wash.-based company credited gains in its cloud computing services for the better-than-expected results.

17% Gain In Cloud Business

Its cloud offerings include Azure infrastructure services, Office 365 productivity software and Dynamics enterprise software.

Microsoft’s revenue rose 17% year over year in the June quarter, powered by the company’s commercial cloud business.

“Microsoft delivered a quarter that had a lot to like,” BMO Capital Markets analyst Keith Bachman said in a report to clients. “MSFT remains one of our top three picks in software, which we refer to as core holdings, along with (CRM) and Adobe (ADBE).”

He reiterated his outperform rating on Microsoft and raised his price target to 125 from 109.


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