Microsoft (MSFT - Free Report) is putting greater emphasis on Azure in a bid to strengthen its foothold in cloud computing market. Moreover, the company is striving to enhance its portfolio by leveraging robust Artificial Intelligence (“AI”) capabilities at various levels.
The Redmond-based tech giant has been on a growth trajectory for quite some time now. Shares of Microsofthave returned 32.7% year to date, outperforming the industry’s rally of 26.8%. The stock has also fared better than the S&P 500 index’s rise of 9.4%.
This outperformance can primarily be attributed to its rapidly expanding efforts in AI and Internet of Things (IoT). Undisturbed focus on Azure continues to remain a key catalyst.
The recent developments comprising new Surface devices, updatesto Windows 10, Ignite 2018 announcements, partnerships involving Open Data initiative and Airband initiative, among others have also fueled investors’ confidence.
New Surface Devices
Microsoft expanded its Surface family just before the holiday season with the addition of new products featuring robust capabilities at an event in New York City. The major takeaways from the event werethe introduction of Surface Laptop 2, Surface Pro 6 and Surface Studio 2 devices.
In a first, the tech giant also introduced smart Surface Headphones, among other accessory devices.
Open Data Initiative
At its Ignite conference in Orlando, FL, Microsoft announced partnership with Adobe (ADBE - Free Report) and SAP (SAP - Free Report) as a part of new Open Data Initiative. As the name suggests, the initiative is aimed to add value to data and obtain more effective consumer data insights.
In this data-driven era, the new initiative is anticipated to poise the company and its partners well to assess purchasing behavior and other trends about customers. We believe as more companies join the initiative, the common data platform will gain strength and businesses will be able to lock meaningful insights.
As part of Airband Initiative, Microsoft partners with telecommunications companies and internet service providers ("ISPs") to provide innovative solutions which enhance rural connectivity. Digital skill training is also imparted to the people under the initiative.
In this regard, Microsoft has partnered Redline Communications, Network Business Systems (“NBS”), RADWIN, to mention a few.
The tech giant intends to utilize the unused television broadcasting frequencies, termed as TV White Space (“TVWS”), to providea robust broadband internet connection to rural areas that presently lack the architecture.
Azure Data Box
Microsoft also announced various updates regarding Azure Data Box at its annual Ignite, 2018 conference. The tech giant announced the availability of Azure Data Box, previews of Azure Data Box Edge and Azure Data Box Heavy.
The new Edge device is a prominent addition to the existing Azure Data Box family, as it provides the tech giant a competitive edge against its cloud computing peers, including the likes of Amazon (AMZN - Free Report) and Google.
MR in D365
The tech giant fortified its presence in the “mixed reality” (“MR”) space by introducing Dynamics 365 Remote Assist and Dynamics 365 Layout. This move is in sync with its strategyto strengthen Dynamics 365 (“D365”) offering with HoloLens MR glasses.
Microsoft’s HoloLens offers MR technology and has gained significant adoption among developers ranging from healthcare, architecture, construction industries to scientific research domain.
Update to Windows 10
Microsoft had unveiled update to Windows 10 on Oct 2, named, “Windows 10 October 2018 Update” or “version 1809”.
The prominent distinction of the update remains “Your Phone” app, enabling users to message from their PCs via an Android or iOS phones, which support the company’s mobile companion app.
The new dark theme, sharing clipboards, enhanced search experience and new screenshot technique are the other notable features.
However, it may be noted that the company has paused the rollout for the time being on account of certain users reporting data deletion post the update,
Positive Earnings Surprise History
Microsoft has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 11.4%.
Microsoft is projected to witness quarterly sales of $27.86 billion in the first quarter of fiscal 2019, based on current Zacks Consensus Estimate, which would mark a 13.5% year-over-year ascent. The company's bottom line is anticipated to grow by 14.3% to reach 96 cents per share.
Further, Microsoft has a long-term expected EPS growth rate of 12.3%.
Microsoft is strengthening almost all its services, hardware and software alike, with advanced AI and machine learning tools. We believe the new products and partnerships will help the company get ahead of the curve, going forward.
Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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