Microsoft (MSFT) Earnings Analysis 25 Jul 23 POST

This week, investors will focus on the Federal Reserve meeting and earnings from tech giants -- Microsoft, Meta Platforms and Alphabet.

Microsoft's (MSFT -0.89%) stock was already on the rise in 2023 (up 17%) when it reported earnings for the fiscal third quarter of 2023 (ended March 31) on April 25.

After the report's release on April 25, its stock went up by another 8% higher as investors celebrated the positive results despite Microsoft’s fellow Big Tech suffer a brutal bear market.

In the article, I will be doing some analysis both from fundamental and technical on how we can see Microsoft earnings on 25 Jul 23.

Here are some of the latest news about Microsoft which might shed some light on how their earnings would appear to us.

US media reported that last week’s redundancies targeted those primarily in customer service and sales roles, but also some engineering project managers and marketing employees.

Microsoft-Activision deal is back in hands of UK regulator after court pauses appeal.

Microsoft is scheduled to release their earning on 25 Jul 2023 Post market and with the cost cutting measure like job cuts, I would expect its EPS to perform much better than $2.55.

Microsoft has beaten by the last quarter EPS by more than 10%, and with the ongoing cost cutting measure, I would expect the EPS to beat estimate by at least 10%.

Microsoft has a good YTD earnings of more than 40%, and this would give confidence of a better earnings report on 25 Jul 2023 expected.

With the demand for A.I. Microsoft cloud services would be benefitting from this demand.

Something worth looking at the financial overview, is the free cash flow that Microsoft has at the end of Mar 2023, it is much higher than the previous quarter.

Despite having such a high free cash flow, I would be looking forward to see if Microsoft have more future plan of acquisitions to increase their product and services offerings.

Microsoft investors are very positive ahead of its earnings and their portfolio holdings for MSFT has increased by 0.9% (last 7 days) and 4.6% (last 30 days).

This would mean that the confidence and faith in Microsoft price and future have been strong.

Microsoft have been on the bull trend about 100 trading days ago, and it has continue a very good upwards move.

I believe what I would be looking at in the latest earnings report would be what would Microsoft future plan be like to capture a bigger market share of the A.I. demand?

And what would be the tradeoff if the deal with Activision got delayed another few more times.

RSI has shown us that Microsoft is very near to entering the overbought region. Is the current traded price overvalued?

If it stayed in the overbought region for longer period, we might see a possibility of some sell off from investors and traders.

Even though we see that SMA show us Microsoft is a bull trend, ADX indicate that the trend is actually developing and +DI above -DI suggest that it is a bullish upwards move.

This would mean that Microsoft has more rooms for the upside. But we will have to monitor and watch the development on their ongoing acquisition.

Microsoft have been implementing cost cutting measure to shed some of its unnecessary fats, I would look out for these result in its earnings report on 25 Jul.

SAR has shown that Microsoft did went through a bullish reversal in early July and it has been on a upward trend since.

I believe a strong and positive earnings would further give it a stronger upward move.

From what the fundamentals have shown us, Microsoft has a good free cash flow, I will watch closely for any new acquisition for them to boost their market share leadership as A.I. demand is expected to grow further.

Technical Analysis have suggested that Microsoft have more rooms for upside if we do not have any surprise from its latest earnings.

I would monitor how Microsoft would be trading on 24 Jul and 25 Jul before its earnings report before deciding whether to take a position.

Appreciate if you could share your thoughts in the comment section whether you think Microsoft would post a better-than-expected earnings and will we see more acquisition coming?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.