The tech sector is undoubtedly going through its worst in the past decade or more. Tech companies are mainly suffering as a consequence of an inventory oversupply for semiconductor companies. A tariff struggle with China has taken a toll on hardware firms, while the Internet and social media companies are facing intense scrutiny following privacy scandals and issues. In the wake of such problems, tech earnings are expected to decline by 10.7% in the second quarter despite a 2.4% rise in revenue.
However, impressive earnings release by two major tech players have provided some relief to the tech sector. Oracle and Micron reported better-than-expected earnings, putting doubts about the fundamental strength of the tech sector to rest. Let’s admit, despite the chances, the tech sector has registered positive functional aspects of around 27% along the end of June this year. This makes people wonder whether the world’s most valuable tech company, Microsoft Corporation MSFT, can come up encouraging results when it reports after the closing bell on Jul 18.
Following its Tax third-quarter earnings release, Microsoft’s market capitalization budgetary past the coveted $1-trillion mark. Now, the tech giant boasts a market cap more significant than that of Amazon and Apple. No uncertainty, the company’s initiatives to build cloud-based software and enhance cloud computing services are helping Microsoft progress by leaps and bounds. These factors are expected to assist Microsoft — a Zacks Rank #2 (Purchase) company — report promising results this earnings season as well. You can see the complete checklist of in the present day’s Zacks #1 Rank (Strong Purchase) stocks here.
Microsoft’s cloud product and Azure, is coming up with massive deals and is building immense pressure on Amazon Net Companies. Azure, now, is not solely the most significant contributor to the company’s commercial-cloud revenues, however, can be rising at a thoughts-blowing rate. But, it’s just not Azure, the company’s other cloud-based merchandise like Office 365 commercial and Dynamics 365 are also expanding at a steady pace.
Microsoft’s legacy software and videogame business is flourishing.
Analysts, thus, widely expect Microsoft to report $1.21 earnings per share in the fiscal fourth quarter, higher than $1.13 published year ago. Analysts additionally estimate sales of $32.8 billion for the quarter ended June, more than around $30 billion recorded a year ago.