Thursday, April 13, 2023

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Microsoft Corp. (MSFT), Berkshire Hathaway Inc. (BRK.B) and NVIDIA Corp. (NVDA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Microsoft’s shares have gained +2.3% over the past year against the Zacks Computer - Software industry’s gain of +3.4%. The company is benefitting from consistent execution across renewal sales motions, including strong recapture rates and growth in Azure cloud platform amid accelerated global digital transformation.

Slow yet steady performance of Office 365 and Dynamics is aiding user growth thereby driving the top-line. Strength in Marketing Solutions and steady performance in Talent Solutions is driving LinkedIn revenues boosted by recovery in advertising and job market. The Zacks analyst expects fiscal 2023 revenues to grow by 4.7% over fiscal 2022.

However, a slowdown in its cloud business and declining videogame sales were headwinds. Decrease in Xbox content and services and Xbox hardware hurt gaming sales due to a decline in first-party content. Increasing spend on Azure enhancements amid stiff competition in the cloud space from Amazon is likely to dent margins.

(You can read the full research report on Microsoft here >>>)

Shares of Berkshire Hathaway have outperformed the Zacks Insurance - Property and Casualty industry over the past six months (+15.4% vs. +14.2%). The company is one of the largest property and casualty insurance companies measured by premium volume. Berkshire's inorganic growth story remains impressive with strategic acquisitions. A strong cash position supports earnings-accretive bolt-on buyouts and indicates the financial flexibility.

Continued insurance business growth fuels increase in float, drive earnings and generates maximum return on equity. The non-insurance businesses are delivering improved results with increased revenues over the past few years. A sturdy capital level provides further impetus.

However, exposure to catastrophe loss induces earnings volatility and also affects the property and casualty underwriting results of Berkshire. Huge capital expenditure remains a headwind for the company.

(You can read the full research report on Berkshire Hathaway here >>>)

NVIDIA’s shares have outperformed the Zacks Semiconductor - General industry over the past year (+24.7% vs. +10.4%). The company is gaining from strong growth of artificial intelligence, high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues. A surge in Hyperscale demand and a solid uptake of artificial intelligence-based smart cockpit infotainment solutions are acting as tailwinds.

Collaboration with Mercedes-Benz and Audi is likely to advance its presence in autonomous vehicles and other automotive electronics space. The Zacks analyst expects its Automotive segment’s revenue to grow at a CAGR of 29% through fiscal 2023-2025.

However, NVDA’s near-term prospects look gloomy due to weakening demand for chips used in gaming and data center end markets. While macroeconomic headwinds are impacting gaming and data center chip demand, higher channel inventory levels are hurting chip prices.

(You can read the full research report on NVIDIA here >>>)

Other noteworthy reports we are featuring today include AT&T Inc. (T), Northrop Grumman Corporation (NOC) and Monster Beverage Corporation (MNST).

Mark Vickery
Senior Editor

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>