Microsoft Corporation (NASDAQ: MSFT) took a beating in recent weeks as the growth-to-value rotation weighed on tech giants in the stock market. Compared to the peak seen in April, Microsoft has tanked 8%, including last week’s 1% decline. The XLK technology ETF, however, recovered to close flat.
Microsoft shares were over 0.5% up in premarket trading on Monday. The stock is now exchanging hands at $246.70 per share (£174.43 per share). This compares to a year-to-date high of $261.97 per share in April.
Danielle Shay’s comments on CNBC’s “Trading Nation”
Simpler Trading’s Danielle Shay (director of options) sees the recent dip in Microsoft as a good opportunity to buy the stock. On CNBC’s “Trading Nation”, Shay said:
“I love Microsoft. It’s one of my favorite long-term growth stocks. It’s just so consistent. They have so many different product segments that are continuing to grow. Earnings are consistent quarter over quarter, year over year.”
In the last week of April, Microsoft reported its financial results for the fiscal third quarter that beat Wall Street estimates. The March quarter marked the largest growth in revenue for Microsoft since 2018. Its public cloud segment, Azure, posted a massive 50% increase in sales. Shay further added on Friday:
“I think this is a fantastic pullback buy. It bounced gorgeously at the 100-day moving average, and I’m targeting $270 in the near term.”
In separate news from the United States, Martin Marietta said it will buy HeidelbergCement’s California and Arizona assets for $2.3 billion in cash.
Piper Sandler’s Craig Johnson is also optimistic about MSFT
On average, Wall Street rates Microsoft at ‘buy’, which substantiates that Shay isn’t alone in supporting Microsoft. Piper Sandler’s Craig Johnson (chief market technician) also expressed confidence in MSFT in the same interview with CNBC and said:
“This is a bullish chart. We just pulled back right toward the lower end of this upward trending price channel, and it looks like one that should be bought.”
Johnson lauded CEO Satya Nadella for a mind-blowing performance in recent years. MSFT gained 42% last year and 565% since Nadella took the helm in 2014. He said:
“Nadella has outpaced Apple and certainly has a better track record than former Microsoft CEO Steve Ballmer, who underperformed the Nasdaq, so hats off to Satya Nadella for a great job.”
At the time of writing, Microsoft is valued at $1.85 trillion and has a price to earnings ratio of 33.37.
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Wajeeh Khan
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