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AI-Driven Growth Is The Future – Microsoft Q3 Earnings

Microsoft is set to release its Q3 2023 financial results on Tuesday, April 25, after the market closes. We’ll keep you updated when that happens, so stay tuned for tomorrow’s article! Here are the key points to consider ahead of the announcement:

  • Analysts predict earnings per share of $2.24 and revenue of $51.11 billion for the quarter.
  • Earnings are anticipated to drop 3.5% in Q2 2023 but remain relatively stable compared to Q3 2022.
  • Projected sales have decreased by 3.2% from Q2 2023 but increased by 3.5% from Q3 2023.
  • In the past four quarters, Microsoft has exceeded profit estimates three times and revenue forecasts twice.
  • This will be the first financial report since Microsoft’s $10 billion investment in OpenAI, the AI startup behind ChatGPT, in January 2023.

“BofA” analysts predict a possible revenue shortfall due to declining PC sales but view this as a temporary issue. They believe Microsoft is well-positioned for AI success, thanks to its computational scale, data scale, and data management/engineering skills. BofA recently raised Microsoft’s price target from $300 to $320, citing AI-driven growth potential.

Microsoft’s stock is currently trading at $285 per share, up 19% year to date, and about 18% below its all-time high of $349 in November 2021. The company’s forward price-to-earnings ratio stands at 28.9. 

MSFT stock chart by TradingView

Two stocks that could benefit from this news:

  1. Nvidia (NVDA): As a leading provider of GPUs, Nvidia could benefit from Microsoft’s increased focus on AI and data management.
  2. Amazon (AMZN): With its AWS cloud services, Amazon could see a boost in demand as Microsoft continues to grow its AI capabilities.

Two stocks that could be negatively impacted by this news:

  1. IBM (IBM): Microsoft’s growing AI focus could pose a threat to IBM’s own AI and cloud services.
  2. Alphabet (GOOGL): Google’s parent company could face increased competition in the AI and cloud computing market due to Microsoft’s investment in OpenAI.

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Justin Hopper

Justin Hopper is an editor of the digital media at Wealthy VC and TCI. If you have questions don't hesitate to reach out! Twitter | Email

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