Microsoft Rises into Q4 Earnings Report After CrowdStrike Outage
Microsoft Rises into Q4 Earnings Report After CrowdStrike Outage
Microsoft stock is up over 3% since Friday, while CrowdStrike trades 10% lower
- Microsoft is scheduled to report fourth-quarter fiscal earnings on Tuesday, July 30.
- The company’s stock price is trading just below its recent all-time high, as volatility rises.
- Options show an expected move of +/- 21 for Aug. 2 expiration.
Microsoft trades higher into earnings after global IT outage
Microsoft (MSFT) will report its fourth-quarter fiscal results on Tuesday, July 30, after market close.
It’s been a tumultuous week for Microsoft leading up to the earnings report, as the global IT outage caused by a software update from CrowdStrike (CRWD) brought down computers running Microsoft’s Windows operating system, affecting everything from airlines to retail payment terminals.
Most companies have remediated the outage, but airline operator Delta (DAL) continues to cancel hundreds of flights as of July 23. Microsoft has put blame on the European Union and its rules that prevent it from walling off kernel access to third-party security app developers.
Microsoft and CrowdStrike are separately owned, but their software is closely integrated. Microsoft stock is up over 3% since Friday, while CrowdStrike trades nearly 10% lower over the same time. Meanwhile, market volatility remains elevated as traders grapple with a quickly evolving political landscape in the United States.
What do investors expect from Microsoft?
The report will mark the third earnings for this season from the Magnificent Seven—a group of stocks that make up about half of the Nasdaq’s weighting—following reports from Tesla (TSLA) and Alphabet (GOOG), which report earnings today. Meta Platforms (META), Apple (AAPL) and Amazon (AMZN) will report in the two days following Microsoft.
According to Yahoo Finance, investors expect MSFT to report earnings per share (EPS) of $2.93 for the quarter ending in June. Revenue is expected to come in at $64.4 billion. That would be up from $2.69 per share on $56.2 billion revenue from a year ago. Last quarter, MSFT reported EPS of $2.94 on $61.9 billion in revenue. The average analyst price target is 494.19, which is 10% above today’s stock price.
Microsoft’s Intelligent Cloud segment is in focus after posting year-over-year growth of 21% in the third quarter. Capital expenditures on AI infrastructure should increase as the company expands capacity to meet growing demand, which outpaced capacity over the last quarter.
Last quarter’s guidance called for 10% to 13% growth in personal computing, and a revenue decline to the mid to high single digits for enterprise and partner services. Gaming revenue growth was forecasted in the low to mid-40s, with the Activision acquisition considered. CEO Satya Nadella and Chief Financial Officer Amy Hood will hold a conference call following the results.
Trading Microsoft earnings
Options pricing shows an expected move of +/- 21 points for the Aug. 2 expiration. That represents a 4.7% move based on today’s stock price of 446.60. That isn’t necessarily a large move for earnings.
MSFT’s implied volatility rank (IVR) stood at 63.3, meaning volatility is elevated relative to the past 12 months. An iron condor with the short strikes set at or just beyond the +/- 20 point range would make sense for traders who expect the stock price to stay within the expected move.
Technically, MSFT saw resistance today at its 9-, 12- and 21-day exponential moving averages (EMAs). If prices can clear the EMAs, it would bring the July all-time high into focus.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.