Will Microsoft Have A Better Quarter Than Intel?
Analysts have high hopes for Microsoft Corporation's (NASDAQ: MSFT) FY2015 Q1 results.
"I think Microsoft will have a good report," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "The software sales are doing well [and] the Windows upgrade cycle is still in full force."
"Intel had a fine quarter," Udall added, noting that Intel can be a good indicator of how Microsoft might perform. "And Microsoft, I think, is going to have as good of a quarter -- if not better. [But] I'm not sure it's going to be enough to move the stock because the stock has already had a big move."
The Transformation Begins
Tech industry expert and analyst Jeff Kagan has high hopes for Microsoft as well.
"They'll probably be good," Kagan said of the report. "They turned around in the last year or so with the new CEO because they had new ideas. The new CEO is driving Microsoft in new directions [and] is going to carve out a slice of this new pie. The industry is transforming, it's a brand-new pie, and it's got lots of dollars in lots of segments."
Kagan said that the firm's longer-term potential "really depends on how successful Microsoft is going to be in those segments."
"We've seen action that they're moving in that direction," Kagain added. "That's good, but that's only the first step. Next, we have to see if they're going to be successful at this and where they're gonna rank."
Another analyst (who asked not to be quoted by name) told Benzinga that while the other stuff matters, "continued traction for enterprise" is the most important element.
"Their consumer business matters," the analyst remarked. "The reality is that the enterprise generates most of their profits. From an investment perspective, I think continued traction of their cloud offerings, making sure they continue to see good sales of their enterprise license agreements around Windows with their big clients -- those are the things that really move the needle for these guys."
The analyst also said that while it is necessary for Microsoft to have some level of engagement on the consumer side, "The reality is that whatever they do in the consumer space, it just isn't going to impact the overall enterprise business at all."
"The reason you want to have some sort of position in that market, frankly, is just to have Windows on more devices so you can sell more apps on those devices," the analyst added.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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