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Microsoft’s quarterly earnings report, released yesterday, exceeded expectations. Revenue reached $38 billion, surpassing the anticipated $35.5 billion, while earnings per share came in at $1.46, above the $1.36 forecast. The Intelligent Cloud segment generated $13.4 billion, beating the forecast of $13.1 billion and marking a 17.4% increase.
Azure cloud revenue grew by 47%, though this was a slight deceleration from the previous quarter. Xbox revenue jumped 65%, and Surface hardware sales increased by 28%. However, search advertising revenue fell by 18%.
Despite the strong earnings report, Microsoft’s stock is down today. Analysts are concerned about potential challenges with margins in the upcoming quarters, especially when comparing 2020 to 2021.
Microsoft’s market capitalization is currently $1.61 trillion, with a P/E ratio of 36.14. The PEG ratio stands at 2.47, and the price-to-sales ratio is at 11.27.
The stock is trading 2.13% lower at $207.30, erasing yesterday’s gains. This decline follows the all-time highs reached earlier in July, driven by high demand for its services during the pandemic lockdown. Despite this recent pullback, the technical outlook remains positive, and any further drops could present buying opportunities.
Support for Microsoft’s stock is first seen at $202.59, the low from July 20. Additional support may emerge at $195.45, the 50-day SMA. A decline below this could lead to a test of $184.07, the low from June 15.
On the upside, immediate resistance is at $210.92, the daily low. If the stock breaks through this level, the next target is $213.52, the high from July 21. The all-time high of $216.38 would be the next key resistance level.