My style of analysis is not about calling earnings. I have a much longer buy-and-hold strategy, and sometimes, missed earnings is a buying opportunity if the stock has good long term potential. Please keep that in mind!
With that said, I doubt we will see a slowdown in earnings from the major cloud providers. The broader market may drag down tech as a sector, however, cloud is a more secular trend.
I spoke with the CTO of Kubernetes at IBM yesterday at OSCON, the Open Source Conference in Portland. He stated cloud has a long runway with about 80% of companies still running on-premise.
Microsoft is unique because they attacked this problem from a new angle; the hybrid cloud. This allows companies to keep sensitive information on-premise and less sensitive information off-premise. This is a winning strategy because it will allow AI applications and scalability without compromising security and IP.
Again, this is not an earnings call, but Microsoft is a company that has runway despite already hitting the $1 trillion mark. If there is a missed earnings, or the broader market drags tech stocks down, this will be welcomed news for entering the stock.
- If you already own MSFT at an attractive price, you should have a solid investment into the foreseeable future
- If you’re looking to enter MSFT, wait for a missed earnings (from too high of expectations from analysts) or for a broader sector sell-off
- We will provide more fundamental analysis and technical analysis when something new occurs