Should the market continue a “sell-in-May” mantra, Microsoft (NASDAQ:MSFT) is more likely to trade at new highs. The company offers valuable collaboration tools for organizations. Unlike Zoom (NASDAQ:ZM), which admitted it did not have 300 million users, Microsoft’s Team App enjoyed strong growth.
The stay-at-home order also forced workers to become remote work-at-home users. This lifted Microsoft 365 and Teams. Microsoft said it saw over 200 million meeting participants in a single day of a month. It recorded over 4.1 billion meeting minutes and 75 million daily active users.
The all-important health-care sector recorded over 34 million Teams meetings.
The usage translates to strong subscription revenue. Office 365 now has 258 million paid seats. Microsoft’s Azure, Windows Virtual Desktop,
Dynamics 365, and LinkedIn are all seeing more usage. Years after LinkedIn looked like an overpaid acquisition, it is now a hot site. Over 690 million professionals access the site to connect, find opportunities, and learn new skills.
In its third quarter, Microsoft enjoyed revenue growing 15% to $35 billion. Gross margins increased by 18%. The 23% EPS growth, to $1.40, should continue. Remote work is not changing anytime soon, so this will increase the demand for Microsoft’s products.
MSFT stock has a fair value of $226.65 (per stockrover).