While Microsoft’s (NASDAQ:MSFT) decision to begin implementing ChatGPT within its own ecosystem of products and services has certainly positively impacted the business’s investment attractiveness and helped its shares to appreciate since the beginning of the year, the company nevertheless has several other growth catalysts that have all the chances to also create additional shareholder value in the foreseeable future. Microsoft’s recent successful earnings report for Q2 indicates that the business is able to continue to grow at an aggressive rate even in the current turbulent macroeconomic environment thanks to the strength of its core products that continue to have a dominant position on the market and help the company to outperform expectations. Considering this, there are reasons to believe that Microsoft’s shares have all the chances to retain their momentum and continue to appreciate further as the start of the disinflationary process could give the stock an additional boost.
Satya Nadella Continues To Deliver
Ever since taking the reins of Microsoft in 2014, Satya Nadella has focused on improving the company’s core products to create a formidable ecosystem that would be able to attract new customers and help scale the overall business at an aggressive rate. The recent earnings report for Q2, which was released at the end of January, shows that this business model has been successful, as even during the turbulent macroeconomic environment, Microsoft’s business nevertheless managed to grow as its revenues during the period were up 1.9% Y/Y to $52.7 billion. If we exclude the impact of the strong dollar during the period, then Microsoft’s revenues were up 7% in constant currency. What’s also important to note is that the company’s gross margins were up as well while its cloud business was able to grow at an aggressive double-digit rate of 18% and generated a greater amount of revenue in comparison to other segments.
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