Key Takeaways From Microsoft's Financial Analyst Brief

In a report published Friday, JPMorgan analysts maintained a Neutral rating on Microsoft Corporation MSFT, with a price target of $47, after attending the company's Financial Analyst Briefing, which is part of the Build 2015 developer conference in San Francisco.

In the report JPMorgan noted the key takeaways as:

• Windows 10: "Satya Nadella noted the concept of “Windows-as-a-Service,” in that 800+ million devices are kept current free of charge, with potential post-sale revenue streams from Search and PC gaming etc." Microsoft also said it is aiming at a billion active Windows 10 devices by FY18.
• Productivity and Business Applications: "Microsoft highlighted strong momentum in Office 365 and Dynamics, while noting how the shift from license to cloud has increased customer LTV and also provided a rich graph of user information that can be leveraged across organizations."
• The Cloud Platform: "The company noted Azure Active Directory as one of the most important assets of the company, which is at the core of every Office 365 or Dynamics CRM sale, creating a solid foundation of information to build upon."

Microsoft projected its cloud revenue run rate at $20B by FY18, which represents a ~40 percent CAGR from FY16 to FY18. "While the PC cycle and Windows dynamic are still highly relevant, we believe Microsoft is pushing forward with a successful cloud strategy," the analysts said.