MSFT products and services are growing every year. Only good old Windows OEM and search ads are disabled. As forecast by Azure, the growth rate of the fast-growing business components is still close to 50% year over year. Other businesses like Surface Hardware, Xbox Gaming and Dynamics 365 are also seeing significant growth of over 30%. Note that most of these fastest-growing products contain sticky products and services. When someone chooses Azure or Dynamics, there is a real reason for sellers to get stuck. It’s perfect for Microsoft because it has the highest recurring revenue.
Microsoft is expanding the game library of its GamePass subscription service to increase the number of users of the console and make it more competitive with Sony and Nintendo. The company has partnered with EA Electronic Arts to combine the latter EA Play service with an Xbox GamePass subscription at no additional cost. EA Play gives Ultimate Pass subscribers access to over 60 popular EA titles on Xbox Series S and X consoles, as well as Xbox One.
MSFT in the way of increasing valuation
MSFT’s operating income improved by 25% over the same period. The company’s sales of the LinkedIn professional networking website increased by 16%. More Personal Computing is the name of the segment that includes Xbox, Windows, Surface, and Search Network ads. This segment posted revenue of $ 11.9 billion in the first quarter. This corresponds to an annual profit of 6%. Fortunately, this feat exceeds analysts’ estimates by nearly $ 700 million. In a segment that focuses on productivity and business processes (Microsoft Office, LinkedIn, Dynamics), the company recorded high revenue growth. That’s more than $ 500 million more than expected, and performance is growing 11% annually.
In addition to corrections over the past couple of months, the growing reliance on technology products and services during the pandemic has led to an increase in technology inventories this year. Measuring social distance has forced workers and students to adapt to work and study in a family environment.
Here’s another example of the company’s wide range of product strengths. Microsoft plans to release two different Xbox consoles (S series and X series) in mid-November. The company currently expects revenue growth in the gaming segment of more than 20%.
Additionally, the US Megatech stocks emerged as winners. Tech stocks hit the NASDAQ Composite near record highs last week after a nearly 8% rise. These stocks are popular with investors due to their high growth potential. Hence, MSFT is a good buy also. If you plan to buy this stock, you can check its cash flow at https://www.webull.com/cash-flow/nasdaq-msft.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.