Microsoft’s Unstoppable Rise: How to Seize the Opportunity When the Market Adjusts
(Photo = Yonhap News)
[알파경제=김민영 기자] Even though Microsoft (MSFT) reported good quarterly results, its conservative guidance caused its stock price to plummet 6%.
According to Korea Investment & Securities, Microsoft’s sales in the first quarter of fiscal 2025 were $65.6 billion, up 16% from the previous year, and operating profit was $30.5 billion, up 13%, meeting the consensus. Productivity and Business Processes reached $28.3 billion (+12.3% YoY, -1.1% QoQ) driven by growth in commercial cloud (+15% YoY) and Dynamics365 (+18% YoY). Intelligent cloud sales were estimated to be $24.1 billion (+20.4% YoY, +1.3% QoQ), driving overall sales growth with Azure and cloud service sales increasing by 33%.
Personal computing sales recorded $13.2 billion (+16.8% YoY, +7.0% QoQ). X-box content sales growth recorded 61%, and search and advertising-related sales also recorded high growth of 18%.
Jeong Ho-yoon, a researcher at Korea Investment & Securities, said, “We recorded good performance, slightly exceeding the $64.8 billion, which was the upper end of Microsoft’s guidance for the first quarter,” and “This is because cloud-related sales recorded high growth at $38.9 billion (+22% YoY).” I figured it out. AI-related sales are expected to exceed $10 billion annually in the next quarter.
Microsoft stock diagnosis (Source = Choice Stock)
Researcher Jeong Ho-yoon said, “The high growth of the cloud business through the incorporation of generative AI is creating Microsoft’s strong performance,” adding, “Many corporate customers are rapidly switching from existing applications to AI-based business solutions, and this is a result of Dynamics. “This is leading to a rapid expansion in the distribution of Microsoft’s core generative AI-based services such as 365 and Microsoft Copilot,” he explained.
However, the company presented short-term, conservative guidance for the second quarter. The sales forecast is expected to be between $68.1 billion and $69.1 billion, with a growth rate decline of about 5.5 percentage points compared to the first quarter.
Researcher Jeong said, “The growth potential of the core business unit is solid, and the decline in quarterly growth is because the base for this has increased a year after the acquisition of Blizzard.” He added, “The conservative guidance has nothing to do with the main business, and since it is still solid, it should be used as a buying opportunity when the stock price adjusts. “I will do it,” he advised.
Reporter Kim Min-young of Alpha Economy (kimmy@alphabiz.co.kr)
