Microsoft (NASDAQ: MSFT) stock jumped 4.3% in after-hours trading even after the company announced it had missed its Q4 earnings, on July 26. Surprisingly upbeat guidance given on the earnings call had investors pile into the stock in the extended trading session.
CEO of the Redmond giant, Satya Nadella, highlighted that the company expects double-digit sales and operating income growth in fiscal 2023, with margins possibly remaining flat. This aligned with its previous guidance when the company pinpointed concerns around an upcoming recession.
“In the fourth quarter of fiscal-year 2022, evolving macroeconomic conditions and other unforeseen items had an impact on financial results beyond what was included in our forward-looking guidance,” Nadella said.
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Meanwhile, the earnings showed revenues of $51.87 billion, a 12.4% increase year-on-year (YoY), missing estimates by $490 million. Similarly, earnings per share (EPS) were $2.23, missing estimates by $0.07.
MSFT chart and analysis
Despite the after-hours jump, the stock is still down over 24% year-to-date (YTD). Meanwhile, in the last month, MFST has been trading in the $245.94 to $269.06 range, here a resistance line is identified at $268.41, with the support zone between $242.25 and $250.77.
Presently, analysts rate the shares as a ‘strong buy’, with all 26 analysts giving strong buy ratings with none having a hold or sell rating on the stock. In the next 12 months, analysts are predicting that the average price could reach $338.48, which is 34.37% higher than the current trading price of $251.90.
It’s worth mentioning that, like with other companies, a strong U.S. dollar is causing foreign-exchange headwinds for Microsoft, predicting a 4% negative impact for the entire year. Further, gains MSFT made along with some other tech names are leading futures up and could lift the stock market during the July 27 trading session.
Despite a positive twist on the earnings, misses across the board could indicate that investors are in for more volatility soon.
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