- Microsoft is one of the tech giants that’s making a foray into all cutting-edge technologies.
- While it continues to achieve new feats, there are some hiccups that are making its market position a little unstable lately.
You’ll think of Microsoft when you’ll talk about one of the tech giants running the world today. The software giant has a massive market dominance andt consistently forays into other technologies too. The company has its footprints everywhere, from operating systems to hologram technology, social media, and gaming. And all this makes this silicon valley major an all-time favorite of investors too.
Why are there sudden doubts about Microsoft’s stock value?
Microsoft started its operations in 1975 when personal computers began gaining traction. Today, its operating system is ubiquitous, and it powers many users. However, Microsoft’s recent foray into AI technology ander obstacles somewhat extenuated the company’s position.
Though it’s nothing that the company can’t recover, it’s significant from the viewpoint of investors. To understand this, we’ll have to look at some of its recent ventures.
Microsoft is competing with Amazon in Cloud Computing.
In the last few years, Microsoft has made impressive strides in cloud computing. However, it is still lagging behind Amazon on this front. As per the first quarter report by Canalys, Amazon Web Services has a total market share of 32% in cloud services, while Microsoft commands 23%. Its parent company, Alphabet, is the third-biggest, with a market share of 9%. The data also reveals that Microsoft has spent $66.4 billion on its cloud infrastructure during this period.
Microsoft’s bid to venture into the AI landscape
Every tech organization tries incorporating AI into its ecosystem, and Microsoft doesn’t want to run behind. Recently, Microsoft announced that it would invest $10 billion in the artificial intelligence startup OpenAI. OpenAI is the creator and owner of ChatGPT and image generator Dall-E. Notably, Microsoft has made investments in OpenAI before in 2019 and 2021.
Microsoft’s Activision acquisition is halted.
You may also read it in the news about this takeover. Microsoft was ready to buy
Activision in January 2022 for $68.7 billion to gain dominance in the gaming and Metaverse niche. But the Federal Trade Commission wasn’t happy with this acquisition. According to them, Microsoft will gain the power to decimate competition in this sector. However, the company is fighting the antitrust lawsuit in court.
Microsoft stock fundamental analysis report
According to the company’s first quarterly report, it has gained better than expected results. Consequently, the stock price jumped 7.2% in the next trading session. Also, it reported a sale of $52.9 billion, which eked out revenue of $2.45/share. If we talk about earnings and sales, they rose to 10% and 7% respectively. The company has attained an above-par IBD composite rating and IBD relative strength rating too.
Conclusion
Per the current market conditions, Microsoft stock is not a buy. According to the IBD MarketSmith charts, the stock flatlined on March 17 with a threshold of 276.876. The session ended on May 5 at 310.65, from a fall of 276.86 to 290.70 with a 5% buy zone. Still, the markets are hopeful that the share prices will quickly recover.
