The world’s software giant, Microsoft saw its shares drop about 1.66% of its value, immediately after the tech juggernaut gave unimpressive revenue guidance. That said, Microsoft printed impressive first-quarter earnings which exceeded estimates.
What you should know
- Microsoft’s stock price is falling on bearish comments coming from the company after it released impressive earning results, stating that its revenue guidance was weak and further hinted that it continued to face pressure from lower one-off sales of software due to the COVID-19 pandemic.
- Microsoft also revealed that operating profit margins were more likely to be affected in H1 2020 year. It increased its investments in its present cash cow business (cloud computing) while seeing a deep drop off in high-margin sales on its Windows operating system for Personal computers.
- It’s also important to note that the stock bears are hitting hard on the trillion-dollar market capitalized company on the bias that Microsoft further disclosed that for the final three months of 2020, its expected revenue would range between $39.6billion to $40.4billion; or a growth of 8% at the midpoint of the range, compared to global market forecasts of $40.4billion.
Here are some highlights of its most recent earnings;
- Revenue was $37.2 billion and increased by 12%.
- Operating income was $15.9 billion and increased by 25%.
- Net income was $13.9 billion and increased by 30%.
- Diluted earnings per share were $1.82 and increased by 32%.
Revenue in Productivity and Business Processes was $12.3 billion and increased 11%, with the following business highlights:
- Office Commercial products and cloud services revenue increased 9%, driven by Office 365 Commercial revenue growth of 21% (up 20% in constant currency).
- Office Consumer products and cloud services revenue increased by 13% and Microsoft 365 Consumer subscribers increased to 45.3 million.
- LinkedIn revenue increased by 16%.
- Dynamics products and cloud services revenue increased 19% (up 18% in constant currency), driven by Dynamics 365 revenue growth of 38% (up 37% in constant currency).
What they are saying
However, in its recent earnings call, Microsoft CEO, Satya Nadella, gave valuable insights into why Microsoft is heading in the right direction, with significant investments in its cloud businesses.
“The next decade of economic performance for every business will be defined by the speed of their digital transformation.
“We are innovating across our full modern tech stack to help our customers in every industry improve time to value, increase agility, and reduce costs.”
The C.F.O of Microsoft also buttressed the leading software maker’s long term investment.
“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue-generating $15.2 billion, up 31% year over year.
“We continue to invest against the significant opportunity ahead of us to drive long-term growth,” said Amy Hood, Executive Vice President and Chief Financial Officer of Microsoft.
Why Bitcoin still looks like a bargain
With prices exceeding $18,000 for the first time since 2017, BTC looks poised to break its previous all-time high.
As stakeholders, players, and crypto wannabes ponder if increasing their stakes on Bitcoin, the world’s most popular crypto seems ideal now, despite the fact that it’s trading near a record high, Nairametrics decided to weigh in on some key fundamentals showing Bitcoin looks like a bargain.
With prices exceeding $18,000 for the first time since 2017, BTC looks poised to break its previous all-time high. More investors are holding bitcoin for wealth preservation.
A recent report from Glassnode, revealed plummeting Bitcoin exchange balances support the narrative that investors intend to hold their flagship crypto more than ever before, taking into consideration that with the prevailing demand in play, and limited supply of Bitcoin, the price would most definitely go north.
With prices exceeding $18,000 for the first time since 2017, $BTC looks poised to break its previous all-time high.
Meanwhile, plummeting #Bitcoin exchange balances support the narrative that investors intend to hodl.
— glassnode (@glassnode) November 23, 2020
Bitcoin liquidity continues its downward trajectory, buttressing that the macro bitcoin is becoming scarce for open sale.
It is also important to note that Bitcoin has a circulating supply of 19 million coins and a max supply of 21 million coins, meaning there are about 2million left to be mined.
Taking into account that about 4 million Bitcoins have been lost forever as a result of BTCs owners dying, and their next of kin not having access to such cryptos, it is fair to say there are only about 15million BTC presently in circulation to cater for over 7 billion people fighting to have a stake in Bitcoins, meaning that as BTC becomes scarce and more popular, it becomes a matter of time that the crypto asset valuation will hit the roof.
It’s vital to consider the bias saying that as global financial regulators begin to implement their regulatory framework on cryptos, it could become a matter of months for global banks and multinationals to increase their buying pressures on BTC. Thereby, pushing the price beyond the reach of an average investor.
Tesla up 500% in 2020, near $500 billion market value
The tech powerhouse is now less than $6 billion short of approaching the $500 billion market value.
Tesla, the electric car automaker, has gained 500% in 2020 and has become by far the world’s most valuable automaker in the world, despite it producing far less than Volkswagen, Toyota, or General Motors.
The tech powerhouse is now less than $6 billion short of approaching the $500 billion market value, and extending its surge since reports struck Wall Street on Tesla making its S&P 500 debut on December 21, forcing index funds to buy billions of dollars of its share.
Unsurprisingly, it became global investors’ choice amid its recent price action rising by 6% – showing a gain of over 6%. Tesla Inc. extended its rally at the most recent trading session ahead of its December debut in the S&P 500 (SPX), as it is now worth a market value of $494 billion.
Its market capitalization is higher than the Gross Domestic Product (GDP) of any African country, Nigeria – $448.1billion, South Africa – $351.4billion, Egypt – $303.2billion, Algeria – $169.98billion, Morocco – $118.7billion, Ethiopia – $96.12billion, Kenya – $95.5 billion, Angola – $94.6 billion, Ghana – $66.9 billion, Tanzania – $63.2 billion.
What you should know
Now worth $494 billion, Tesla will increase the concentration of heavyweight companies within the S&P 500. It will be the 7th most valuable company within the index, just behind Berkshire Hathaway and ahead of Visa Inc., according to Refinitiv data.
- About a fifth of the car company’s shares is owned by its Chief Executive, Elon Musk and other insiders.
- The S&P 500 is weighted by the number of companies’ stocks available on the stock market.
- The car company’s influence within the benchmark will be slightly reduced, putting it in 8 positions, just behind Johnson & Johnson, with an equivalent of about 1% of the S&P 500 index.
Bank stocks remain a buy amid uncertainty prevailing Nigeria’s economy
The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.
Nigerian Stocks ended the previous week cumulatively on a bearish note.
What we know: The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.
In the previous week, Nigerian Stocks had its bullish run halted arbitrarily on the bias that stock traders and investors intensified their profit, taking into account the significant amount of weak earnings recorded by Nigerian Banks.
It was unsurprising to see four Nigerian banks in the top 10 losers chart for the week, as investors fretted on such performance on the basis that Nigeria’s banking industry remains the most vibrant after Agriculture, Energy in Africa’s largest economy.
That said, In the coming week stock traders are expected to be very cautious amid recent macros showing Africa’s largest economy has dipped into a recession in Q3 as oil production dropped to a four-year low.
Abdul-Rasheed Oshoma Momoh, Head of Capital Market in TRW Stockbrokers Ltd, in a phone chat interview with Nairametrics, said Nigerian markets are presently playing out like a ping pong ball the momentum has slowed down for now.
More of consolidation now as investors buy into good stocks that have a light at the end of the tunnel. (Zenith Bank, UBA, GTBank, First Bank, Access Bank) taking into consideration he doesn’t see any new highs now till 2021.
Bottom- line: Profit taking is expected to remain at least in the near term, taking into consideration Nigeria is officially in a recession, meaning a lot needs to be done to get Africa’s biggest economy on its foot, as such development could trigger more profit-taking in spite of the positive trend playing relatively at Africa’s best-performing equity market.