Microsoft Q1 2024: Strong Cloud Growth Supports Current Valuation

Summary:

  • Microsoft’s stock rose 4% after surpassing earnings expectations in 1Q FY2024, driven by strong growth in cloud revenue, particularly Azure.
  • The company achieved significant double-digit revenue and earnings growth and its highest-ever non-GAAP operating margin.
  • Microsoft’s AI initiatives, including the M365 Copilot, provide a strong catalyst for future growth, even though the company’s outlook for FY2024 remains conservative.
  • I’m bullish on the stock as the current 34x P/E GAAP TTM can be supported by the recent AI developments in my view.

Powerful AI processor on futuristic PCB. A Look into the Future. Futuristic AI icon processing data. Glowing data transfer flowing from the inside. 3D render

da-kuk

What Happened

Microsoft’s (NASDAQ:MSFT) stock popped 4% in aftermarket, driven by 1Q FY2024 earnings that surpassed expectations. Despite the seemingly modest 4% rally, I want to point out that reactions to companies exceeding estimates have generally been muted in this earnings season. This can


Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


Leave a Reply

Your email address will not be published. Required fields are marked *