How Microsoft Earnings Could Soon Hit $20 Per Share

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With the size of the total addressable market [TAM] for public cloud in the hundreds of billions of dollars, combined with multi-year agreements, momentum and secular growth trends, it’s likely that Azure could help boost Microsoft (NASDAQ: MSFT) gains considerably.

Weiss added that a move toward faster growth and “more sustainable” consumption can help Azure maintain growth, continue to be the hybrid cloud leader, and grow market share and platform. as a service, its existing relationships and wide distribution board

For Office 365, which recently underwent a price increase, this is a price increase, but also the possibility of adding more tools and providing customers with valuable benefits such as upgrades improvements to Teams, Power Business Intelligence and Power Apps, and increased security.

It also comes down to increased seat licensing, including frontline worker access, Weiss explained.

Weiss noted that total revenue from Commercial Office, which includes the non-Office 365 version of Office, could reach $60 billion in 2026.

Outside of these two areas, the biggest contributors to Microsoft’s (MSFT) earnings reaching $20 per share are probably Dynamics, LinkedIn, games and security.

Security, ubiquitous in a world where cyberattacks are increasing due to geopolitical issues, is also an important factor for Microsoft (MSFT). Security has helped generate $15 billion in related revenue for Microsoft (MSFT) over the past 12 months, and this is likely to increase as threats remain high and the company sees gains in spending corporate, Weiss said, according to a previous survey.

Gaming is also likely to be a strong revenue driver, notwithstanding the ongoing acquisition of Activision (ATVI).

Weiss noted that with Microsoft’s (MSFT) strength in the cloud, he is in a strong position to improve content and expand his community, which should position gaming as a strong revenue generator for Microsoft in the long run.

The last two growth engines are LinkedIn, which Microsoft (MSFT) acquired in 2016, and Dynamics. Weiss said that since Microsoft (MSFT) acquired LinkedIn, its revenue has nearly tripled as the business-focused social network has expanded into B2B advertising, hiring, training and learning and more. .

Dynamics is likely to help Microsoft (MSFT) cope with changes in the business environment by expanding its application portfolio. Although it only represents 2.3% of Microsoft’s revenue in 2021, it could grow by around 20% in the short term, Weiss said.

Earlier this month, Wedbush Securities said Microsoft (MSFT) was among the top tech stocks to buy amid the sector’s recent sell-off due to its “strong free cash flow.”