What’s Going On Here?Microsoft must be wearing sweats, because all this WFH has made it very comfortable: the tech giant reported better-than-expected quarterly earnings late on Tuesday. What Does This Mean?With so many workers still trapped between their own four walls last quarter, it was no major surprise to see Microsoft’s three businesses – which are all WFH-friendly and make up roughly a third of sales each – doing so well. For starters, its cloud computing business saw sales climb by a better-than-expected 23% compared to the same time a year before. Its productivity business got a boost too, with chat-based collaboration platform Teams helping drive a 15% uptick in sales. And last but not least, Microsoft’s personal computing division: it benefited from the wider industry’s fastest sales growth in two decades last quarter, and its sales jumped 15%. Why Should I Care?For you personally: You can run from Microsoft, but you can’t hide.
Still, Microsoft’s going to have to wait to hit the coveted $2 trillion valuation for the first time: investors initially sent its shares down 4% despite the strong results. You might want to keep an eye on that benchmark too, even if you’re not directly invested in its stock. See, the bigger the firm gets, the more disproportionate its influence over US stock market indexes becomes. So if you’re invested in an exchange-traded fund passively tracking one of those indexes, your investments might take a hit when Microsoft’s stock does.
The bigger picture: You can’t sit with us, Microsoft.
Microsoft announced its biggest buyout since LinkedIn earlier this month, in the form of a $16 billion bid for speech-recognition company Nuance Communications. But money can’t buy everything, and the tech giant missed out on the chance to beef up its gaming business when Discord rejected its $12 billion acquisition offer last week. The video game chat platform, it turns out, has bigger ambitions – namely a mooted initial public offering that’d value it at as much as $18 billion. | 