Microsoft Quarterly Earnings Report: Bracing for a Surprise?

<h3>Microsoft, Daily</h3>
<p>Many top companies are reporting their first quarter financials this week, including Microsoft <span><strong>(MSFT)</strong></span>. The earnings reports this week are very crucial as investors are looking for clues or guidance on how the 2020 outlook appears after more than two thirds of the world economy shut down due to the Covid-19 pandemic.</p>
<p>The coronavirus outbreak has caused severe supply chain disruption since early 2020. Microsoft acknowledged in February that its near-term business is likely to miss estimates as its <strong>More Personal Computing</strong> (which makes up a third of Microsoft’s total revenue) suffered the most due to the virus outbreak. The shipments of the personal computing segment declined 12.3% y/y in the 1st quarter of 2020 (Source: Gartner.com). The company had expected revenues between $10.75 billion and $11.15 billion. However, work-from-home and stay-at-home orders in the wake of the worldwide lockdown lead to an unexpected boost in demand for office equipment? This is expected to generate increased revenues from mobile Surface devices and a slight increase y/y.</p>
<p>The strength of Microsoft’s <strong>Intelligent Cloud</strong> business will continue to be the catalyst for the stock’s strong return over the year to date. <strong>Azure</strong> revenues surged 64% at constant currency on a y/y basis in the last reported quarter. Microsoft’s cloud platform business ‘Azure’ has experienced a significant surge in demand as the work-from-home trend continues. Microsoft’s Azure is a recurring subscription business model which will increase company revenue, and Microsoft also reported a huge surge in subscriptions on <strong>Teams</strong> and <strong>Windows Virtual Desktop</strong> as its subscribers made calls and meetings as part of Work-from-home and Stay-at-home activities. There are incredibly high expectations that Azure has performed well to reflect continued strength in the consumption and per-user based services.</p>
<p>Microsoft will report its quarterly earnings this Wednesday (April 29) after hours. The tech giant is expected to report adjusted earnings per share of $1.26 (source: Yahoo finance), up from $1.14 in the prior-year quarter, according to third-party consensus analyst estimates. Revenue is projected at $33.64 billion, up 10.50% from a year ago ($30.57 billion in revenue).</p>
<h3>Technical Analysis</h3>
<p>It has been a roller coaster year for MSFT shares, as its price reached the all-time high at $190.20 on 11th February and then declined ~30% to a 2020 low 6 weeks later at <strong><span>$132.52</span> </strong>(23rd March 2020). The share rebound back to April high $179.80 before moving to $174.17 (at time of writing, April 27). The MSFT share price has risen ~10% for the year 2020.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/04/2020-04-28_15-19-58.jpg"><img class=" wp-image-126915 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/04/2020-04-28_15-19-58-300×214.jpg" alt="" width="588" height="420" srcset="/wp-content/uploads/2020/04/2020-04-28_15-19-58-300×214.jpg 300w, /wp-content/uploads/2020/04/2020-04-28_15-19-58-1024×730.jpg 1024w, /wp-content/uploads/2020/04/2020-04-28_15-19-58-768×548.jpg 768w, /wp-content/uploads/2020/04/2020-04-28_15-19-58-100×70.jpg 100w, /wp-content/uploads/2020/04/2020-04-28_15-19-58-696×496.jpg 696w, /wp-content/uploads/2020/04/2020-04-28_15-19-58-1068×761.jpg 1068w, /wp-content/uploads/2020/04/2020-04-28_15-19-58-589×420.jpg 589w, /wp-content/uploads/2020/04/2020-04-28_15-19-58.jpg 1094w" sizes="(max-width: 588px) 100vw, 588px" /></a></p>
<p>From the technical perspective, the trend is currently <strong>bullish</strong>. The widening gap between tankan-sen and kijun-sen and also the kumo shift to up-kumo show a strong bullish momentum. The share price has broken the down-kumo (14th Apr) and remained above since then. The ichikou-span being currently inside the up-kumo, suggests the high probability that the price is in the consolidation- phase. The nearest support is at <strong><span>$171.77</span></strong> followed by <strong><span>$161.61</span></strong>. The nearest resistance is at <span><strong>$180.66</strong></span> (span-A peak) and followed by the highest price <strong><span>$190.14</span></strong>. The 14-day RSI indicator is currently above 50 level at 57.47.</p>
<p><strong>Click </strong><a href="https://www.hotforex.com/en/trading-tools/economic-calendar.html"><strong>here</strong></a><strong> to access the HotForex Economic Calendar</strong></p>
<p><strong>Tunku Ishak Al-Irsyad</strong></p>
<p><strong>Market Analyst </strong></p>
<p><strong>HF Educational Office – Malaysia</strong></p>
<p><strong>Disclaimer: </strong>This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.</p>