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Microsoft (MSFT) Updates Windows 11, Adds File Explorer Tab

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Microsoft (MSFT - Free Report) announced that the company has begun rolling out the Windows 11 2022 update, the first major update to its latest operating system since it was launched in October 2021. Dubbed Windows 11 version 22H2, the update brings several new features and improvements to Windows 11.

The company has started rolling out the Windows 11 2022 update in more than 190 countries, and users of both Windows 11 and Windows 10 can get the update on their devices.

Although Microsoft has diversified its business away from Windows by growing its Azure public cloud and acquiring assets such as the LinkedIn business social network, Windows revenues increased $49 million or 1% year over year in the fiscal fourth quarter of 2022, primarily driven by growth in Windows Commercial, offset in part by a decrease in Windows OEM.

Windows Commercial products and cloud services revenues increased 6%, driven by the demand for Microsoft 365. Windows OEM revenues decreased 2% driven by the production shutdowns and a deteriorating PC market.

In the year-to-date (YTD) period, shares of Microsoft have returned 27.9% compared with the Zacks Computer-Software industry’s decline of 29.9%.

A Detailed Look at the Windows 11 Update

With the latest update, users can combine program icons into folders on the Windows 11 Start menu. They can drag an icon on top of another to combine them in a folder and give the folder a custom name to reduce clutter.

The other change allows users to adjust the relative size of the two Start menu sections, one for pinned program icons and the other for recommended content, such as shortcuts to files users have opened recently and frequently used apps.

The updates bring improved local and current events coverage in the Widgets board and better Snap layouts with improved touch navigation, along with the ability to snap multiple browser tabs in Microsoft Edge.

The company has added a multiple-tab interface. While users can still choose to open multiple File Explorer windows, keeping folders open in separate tabs makes it easy to cut, copy, and paste between different locations without having to juggle multiple windows. The navigation pane on the left has been revised slightly, with a new Home icon and tighter integration with Microsoft's default cloud storage service, OneDrive.

Microsoft has designed a new security feature called Smart App Control in this update to keep Windows 11 PCs free of malware by preventing users from running unknown, untrusted apps.

Windows 11 already includes a voice typing feature for converting speech to text and entering the results in any dialog box or app window that can accept text input. The 2022 Update adds support for a new feature called Voice Access, which makes it possible to navigate the entire Windows interface using voice commands. Users can select and edit text, control the mouse and keyboard, interact with apps, and switch between command and voice modes.

Windows 11 has added two features that are especially useful at keeping users from being distracted by notifications and other interruptions. The Do Not Disturb feature temporarily suppresses all but high-priority notifications and has an on-off button at the top of the notification center. The Focus feature (previously called Focus Assist) is a productivity-focused feature designed to minimize interruptions from the computer for a specific period of time.

One of the most notable features of Windows 11 is its ability to run Android apps, attributed to the inclusion of the Amazon (AMZN - Free Report) Appstore. It is now available in 31 countries, with over 20,000 Android apps. The company has improved the graphical performance of Android apps in the latest update.

Zacks Rank and Key Picks

At present, Microsoft carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks from the broader Computer and Technology sector are Clearfield (CLFD - Free Report) and Silicon Laboratories (SLAB - Free Report) , each sporting a Zacks Rank #1.

The Zacks Consensus Estimate for Clearfield's fourth-quarter fiscal 2022 earnings has been revised upward by 10 cents to 80 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved 36 cents north to $3.13 per share in the past 60 days.

Clearfield’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 33.9%. Shares of CLFD have risen 10.3% YTD.

The Zacks Consensus Estimate for Silicon Laboratories’ third-quarter 2022 earnings has increased 36.1% to $1.13 per share over the past 60 days. For 2022, earnings estimates have moved 20.5% up to $4.41 per share in the past 60 days.

Silicon Laboratories’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 63.6%. Shares of SLAB have decreased 37.4% YTD.

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