ALB Limited 01.02.2023

Microsoft – NASDAQ movement within 2022

​​​​​​On the last trade date of January 25, 2023 the closing price is 240.61USD.

Earlier this week, on January 24, it released its 4th quarter and 2022 financial period reports for 2022. For more detailed review FY23 Q2 – Press Releases – Investor Relations – Microsoft

Income
The return for 2021 is 51,728 million USD, and this year's rate is 52,747 million USD with only 2% growth. Microsoft says that investors shouldn’t expect higher growth rates in the coming years. However, when we look at the company's financials further, capex has continued to increase since 2016 (announced reports starts from 2016). Looking at the segments, efficiency and business process were announced at 17bn USD while the awaited data was 16.8bn USD, Intelligent Cloud announced  21.5bn USD and Personal Computing awaited 14.7bn USD while 14.2bn USD was announced.

At the same time, there are two items that should be added that Microsoft continued to increase its investments while in this low growth situation. They  invested 10bn USD in OpenAI. 10,000 employees were also laid off. Most large companies, not just tech companies, are seeing very high hiring rates between 2018 and 2022. One of the important reasons for the layoffs is simply the slowdown in the American economy, the increase in employee costs, and at the same time, there is not as much labour needed as at the time of the pandemic. One of the important factors in decrease in growth was the decline in demand of Azure, Microsoft's cloud system. While large technology companies continue to invest in AI and Cloud systems, investors should pay attention to Cloud storage and sharing systems built on the Blockchain system. There is a large majority that does not trust the security and the hardware, no matter how much investment is made by the big companies such as Apple, Amazon, Microsoft. It is among the high possibilities that parties with a feeling of insecurity will shift to Blockchain. These deviations will certainly affect the company's revenues in the future.

Operating Profit

The financial reports published the operating profit as 20.4bn USD in the US-GAAP (generally accepted accounting principles) system. It decreased by 8% compared to the previous period.

Net income

Net profit, on the other hand, was 16.4bn USD, down 12% compared to the previous year.

Earnings Per Share

It was announced as 2.20USD. It is a very low value compared to previous years.

1-year movement within 2022


There is the fact that it has been a challenging year for tech companies. At the same time, 2023 will be a more challenging year for Microsoft, with the expected slowdown in the American economy not being realized and it is known that interest rate hikes will continue significantly in 2023. The stock value decline in the last year can be seen on the chart. I am not a supporter of a recommendation to trade or hold, but it should be known that Microsoft will always be Microsoft.

Tags: Microsoft, Stocks

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