Like most megacap growth stocks, Microsoft (MSFT 2.31%) had been down big year to date due to a widespread sell-off, tariff turmoil, and recession fears. But Microsoft and other growth stocks have recovered in recent weeks.On Thursday, Microsoft rocketed even higher in response to a monster third-quarter fiscal 2025 report and strong guidance. At the time of this writing, Microsoft has rebounded by so much that it is now positive on the year even though major indexes like the S&P 500 (SNPINDEX: ^GSPC) and N ...

Core Viewpoint - Microsoft is positioned for improved performance in 2025 following strong fiscal Q3 results and positive guidance, despite lagging behind its peers in the previous year [1]. Group 1: Azure Growth - Azure revenue increased by 33%, or 35% in constant currencies, marking the seventh consecutive quarter of over 30% growth [3]. - The growth was attributed to faster-than-expected capacity coming online and strong performance in non-AI business, with AI services contributing nearly half of Azure's overall growth [3]. - The overall "intelligent cloud" revenue rose 21% year over year to $26.8 billion, with GitHub's user base quadrupling to over 15 million [4]. Group 2: Future Outlook - For fiscal Q4, Azure revenue is forecasted to grow by 34% to 35% in constant currencies, driven by strong demand [5]. - Microsoft plans to increase its fiscal 2026 capital expenditure budget, focusing on short-lived assets like servers and GPUs rather than long-lived assets [6]. Group 3: Other Business Segments - Revenue from productivity and business processes, including Microsoft 365 and LinkedIn, grew 10% year over year to $29.9 billion [8]. - Microsoft 365 Copilot customer adoption tripled year over year, with significant growth in deal sizes and customer retention [9]. - The "more personal computing" segment, which includes Windows and Xbox, saw a 6% revenue increase to $13.4 billion, driven by a 21% growth in search and news advertising [10]. Group 4: Financial Performance - Microsoft's total revenue rose by 13% year over year to $70.1 billion, with earnings per share increasing by 18% to $3.46, surpassing analyst expectations [11]. - For fiscal Q4, Microsoft anticipates revenue between $73.15 billion and $74.25 billion, exceeding the consensus estimate of $72.26 billion [11]. Group 5: Investment Perspective - Microsoft is expected to maintain solid growth, particularly in Azure, while managing capacity to meet demand effectively [12]. - The stock trades at a forward price-to-earnings ratio of under 29 based on fiscal 2026 estimates, indicating a fair valuation [13]. - While Microsoft is considered a solid long-term investment, caution is advised against chasing the stock after its recent gains [14].

Core Viewpoint - Meta Platforms has the potential to join the $2 trillion club within the next couple of years, driven by its leadership in artificial intelligence [1] Company Overview - Meta is currently valued at $1.47 trillion, presenting a potential return of 36% for investors if it reaches the $2 trillion milestone [2] - The company operates social media platforms with over 3.4 billion daily users, generating revenue primarily through advertising [4] AI Strategy - AI is central to Meta's future, enhancing user engagement through personalized content recommendations [5] - The introduction of the Meta AI virtual assistant has attracted nearly 1 billion monthly active users within its first year [7] - AI is transforming the advertising experience, allowing businesses to set goals and budgets while Meta's platform autonomously manages ad creation and targeting [8][9] Financial Performance - In Q1 2025, Meta reported total revenue of $42.3 billion, a 16% increase year-over-year, with net income rising by 35% to $16.6 billion [10] - Free cash flow decreased by 17% due to increased capital expenditures, which reached $13.6 billion in Q1 [11][12] Investment in AI - Meta has raised its capital expenditure forecast for 2025 to between $64 billion and $72 billion, focusing on AI development [12] - The Llama family of large language models is a key component of Meta's AI strategy, with the latest models being among the industry's most advanced [13] Market Potential - Meta's current P/E ratio of 22.7 is significantly lower than the average of the current $2 trillion club members, suggesting room for growth [15] - A 58% increase in stock price would align Meta's P/E ratio with the average of its peers, pushing its market cap above $2.3 trillion [17] - If the P/E ratio settles at 29, a 7% growth in EPS could lead to a $2 trillion market cap within 12 to 18 months, supported by an estimated 11% EPS growth in 2026 [18][19]

Core Insights - The article highlights Steven Cress's role as VP of Quantitative Strategy and Market Data at Seeking Alpha, emphasizing his contributions to the platform's quantitative stock rating system and analytical tools [1][2] - Cress is dedicated to removing emotional biases from investment decisions through a data-driven approach, utilizing sophisticated algorithms to simplify investment research [2][4] - His background includes founding CressCap Investment Research, which was acquired by Seeking Alpha in 2018, and previously running a proprietary trading desk at Morgan Stanley [3][4] Company Contributions - Seeking Alpha's Quant Rating system, created by Cress, is designed to interpret data for investors and provide insights on investment directions, saving time for users [1][2] - The platform offers a systematic stock recommendation tool called Alpha Picks, aimed at helping long-term investors build a high-quality portfolio [1] Professional Background - Cress has over 30 years of experience in equity research, quantitative strategies, and portfolio management, positioning him as an expert in various investment topics [4] - His previous roles include leading international business development at Northern Trust and founding the quant hedge fund Cress Capital Management [3][4]

Core Viewpoint - The narrative surrounding the slowdown of the AI revolution, particularly regarding Nvidia, has been overstated, with strong demand for AI-related products and services continuing to drive growth [1][2]. Group 1: Nvidia's Performance and Market Position - Nvidia has experienced significant stock growth, increasing more than eightfold in two years leading up to 2025, primarily due to the demand for GPUs essential for AI [1]. - Despite a recent decline of approximately 25% from its peak, Nvidia's data center segment has shown six consecutive quarters of triple-digit year-over-year growth [2][4]. - Nvidia's major customers, including Microsoft, Amazon, and Meta Platforms, have reported robust demand for AI services, indicating ongoing strength in data center spending [5][8]. Group 2: Customer Insights and Spending Trends - Microsoft reported a 33% year-over-year growth in Azure Cloud, with 16 percentage points attributed to AI services, reflecting strong demand [5]. - Amazon's VP of global data centers stated that there has been no significant change in demand, reinforcing the positive outlook for data center spending [8]. - Meta Platforms announced an increase in its 2025 capital expenditures to $68 billion, highlighting additional investments in data centers to support AI efforts [8]. Group 3: Revenue Contribution and Market Dynamics - Nvidia's four largest customers account for nearly 53% of its revenue, with Microsoft, Meta Platforms, Alphabet, and Amazon being key players in the AI space [9][13]. - The ongoing data center build-out is expected to benefit Nvidia, supporting the accelerating adoption of AI technologies [8]. Group 4: Challenges and Long-term Outlook - Despite the positive outlook, challenges such as tariffs and inflation remain potential risks for Nvidia's future performance [10]. - The stock is currently trading at 39 times trailing-12-month earnings, with a forward price-to-earnings ratio of 26, suggesting an attractive valuation for long-term investors [12].

Core Insights - Microsoft reported solid Q3 FY2025 results, with stock rising 7% in aftermarket trading, despite ongoing global trade tensions [1] - The company experienced continued strength in its cloud and AI business, particularly in Azure, which showed a sequential growth reacceleration [1] Financial Performance - The Q3 FY2025 results indicate robust performance in key business segments, particularly in cloud services [1] - The growth in Azure reflects a positive trend in the company's overall financial health and market position [1]

Group 1 - The company specializes in providing daily-rebalanced ETP products that include leveraged, unleveraged, inverse, and inverse leveraged factors [1][3] - The research focuses on macroeconomic assessments, strategic sector viability, and market data trends to inform investment decisions [1] - There is a particular interest in Asian markets, including India and China, with in-depth analyses published on economic trends and business narratives [1] Group 2 - The company does not hold any stock or derivative positions in the companies mentioned, ensuring an unbiased perspective in its analyses [2] - The asset under management (AUM) is primarily influenced by investor interest rather than market movements [3]

2 May 2025 CMB International Global Markets | Equity Research | Company Update Microsoft (MSFT US) Cloud revenue growth reaccelerated Microsoft reported (1 May HKT) 3QFY25 (June year-end) results: revenue was US$70.1bn, up 13.3% YoY (2QFY25: +12.3% YoY), 2% better than both our forecast and consensus estimates, mainly driven by a 3/6% beat in Intelligent Cloud / More Personal Computing (MPC) segment. Net profit was up 17.7% YoY to US$25.8bn, 7% better than our forecast and consensus, driven by better- than- ...

The Nasdaq has continued to rebound and drift higher after the market received favorable quarterly results and guidance from Meta Platforms (META)  and Microsoft (MSFT) .Reporting after-market hours on Thursday, both were able to exceed expectations with Meta and Microsoft’s stock spiking +4% and +7% in today's trading session, respectively. Meta's Q1 Results With Meta CEO Mark Zuckerberg stating the company is making good progress on its AI initiatives, the social media giant’s Q1 sales increased 16% year ...

Group 1 - The article discusses the author's background in finance, highlighting expertise in corporate governance, behavioral finance, and investment experience in Indian and US equities [1] - The author holds a CFA charter and a PhD in Finance, indicating a strong academic foundation in the field [1] - The author is involved in producing a weekly investing podcast titled "The Stock Doctor," which may provide insights into investment strategies and market analysis [1] Group 2 - The author expresses a potential interest in initiating a long position in Microsoft (MSFT) and Meta (META) through stock purchases or call options within the next 72 hours [2]