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Microsoft’s stock (WKN: 870747 / ISIN: US5949181045) has also come under heavy selling pressure during the recent turbulence in the stock market. However, slightly lower prices can open up a favorable entry opportunity.
In any case, this is supported by the excellent historical development of stock prices. Over the ten years, prices rose by an average of 27 percent a year, making Microsoft one of the strongest technology companies on Wall Street. There is no end in sight to the long-term steep uptrend as the Windows developer business is still operating at full capacity.
The stock market expects good business results
This is also evidenced by the data for the ended financial year 2021/2022 (as at the end of June 2022), which are to be published on July 21, 2022. Industry experts estimate that Microsoft’s revenue averaged $ 199.0 billion, an 18 percent increase over the year. Earnings are estimated to have increased from $ 8.05 to $ 9.31 per share.
Great successes in business in the cloud
Business in the cloud should have contributed significantly to what is supposed to be a very strong development. According to Microsoft’s April forecast, Azure’s extremely important growth engine, i.e. the central cloud computing platform, should grow by 47% in the fourth quarter of 2021/2022. points less than in the third quarter. This would be a huge success for the US group as Microsoft would likely experience stronger cloud growth than Amazon (AWS) and Alphabet’s parent Google, according to this forecast.
In the cloud sector, Microsoft has enormous growth potential in the coming years. According to market researchers at Grand View Research, the global cloud market will grow by an average of about 15 percent annually until 2030.
Who is the leader in the cloud market?
Until now, Amazon (WKN: 906866 / ISIN: US0231351067) has been the clear market leader in the cloud sector. But that’s only partially true. It really depends on which specific division you are talking about.
According to the assessment of the consulting company Synergy.com, the cloud areas are still managed: Infrastructure as a service (IaaS: access to storage, network components, etc.) and Platform as a service (PaaS: access to the cloud-based environment). by Amazon Web Services (AWS) with a market share of 33%. Microsoft Azure has a market share of 22 percent, while Google Cloud has a market share of 10 percent.
Microsoft is number one in this cloud segment
However, according to Synergy.com, Microsoft is number one in the Software as a Service (SaaS) segment with a 17 percent market share. Here, the group ranks well ahead of the second and third Salesforce (twelve percent) and Adobe (ten percent). In the SaaS sector, service providers make software and applications available over the Internet, often using subscription models.
With a wide range of office software offerings, Microsoft is likely to further increase its market share in the SaaS area in the coming years, with the greatest growth currently being achieved in the collaborative area (teams and company). But Microsoft is moving ever closer to its competitor AWS in the IaaS and PaaS sectors.
Another target price for Microsoft stock
Strong growth in the cloud sector should prove to be a decisive price factor for Microsoft’s stock over the next few years. On the stock exchange, the share, which is listed on the Dow Jones, S&P 500 and Nasdaq 100 indices, reached a record level of EUR 310 in November 2021. After falling to € 230 in June 2022, the price temporarily rose to around € 250 in mid-July. The next target price is respectively the latest all-time record.
If you want to not only rely on Microsoft, but also the heavy five from the US tech industry, you can refer to the following index certificate (WKN: DA0AB2 / ISIN: DE000DA0AB22) on the GAFAM index. In addition to Microsoft, this index also includes Meta Platforms (Facebook), Alphabet (Google), Apple and Amazon.
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