Microsoft Corp. helped. to pay attention to software stocks after issuing a earnings report and insights that have reaped widespread praise.
Following a sad recent stretch for high-growth names, software stocks rose widely on Wednesday along with Microsoft MSFT,
IShares Expanded Tech-Software Sector ETF IGV,
rose 1.9% in midday trading, while Microsoft shares led 4.6%, as many analysts view Microsoft’s forecast as a positive sign for the industry as a whole.
The latest report is “great for most of the software sector, especially organizations with cloud centric business models,” wrote Stifel analyst Brad Reback. He considered Microsoft’s discussion of digital transformation for ServiceNow Inc. “clearly positive.” NOW,
that’s due to the results of the report Wednesday afternoon. He said it also gave upbeat signals for Datadog Inc. DDOG,
Snowflake Inc. SNOW,
at MongoDB Inc. MDB,
Reback also feels good about Microsoft’s prospects. He noted that investors initially seemed scared of the successive speed cuts in the company’s Azure cloud-computing business, but Microsoft “quickly erased” those fears once it gave the forecast call to revenues called for a successive increase in Azure’s revenue.
“Overall, this broad -based strength appears to be sustainable as businesses continue to embrace Microsoft’s growing range of solutions as key components of their digital innovation strategies,” Reback wrote, with a buy rating and $ 380 price target on Microsoft stock.
Read: 24 software stocks, including Microsoft, are expected to increase double digits next year
Wedbush analyst Daniel Ives agreed that Microsoft’s report would “calm nerves on the Street” because of the bullish signals it sent for “the entire tech sector moving forward.”
“Our unwavering view is that despite the skepticism provided by the Fed tightening backdrop and valuations falling from a chasm in tech, the underlying digital transformation growth is accelerating and not declining in 2022,” he wrote. .
Ives maintained his outperform rating and $ 375 price target on Microsoft shares.
Due to recent market conditions, “software and growth stocks were required [Microsoft’s] solid guidance more than ever, ”wrote Jordan Klein, a Mizuho desk-based analyst affiliated with the company’s sales team.
Klein saw “none of the [Microsoft’s] print to worry about ”and suggested that the emotion would help Amazon.com Inc. AMZN,
at Alphabet Inc. GOOG,
GOOGL,
leading their own revenue reports, because both companies also have large businesses in the cloud.
Opinion: The post-earnings roller-coaster ride of Microsoft stock is not the latter
Bernstein’s Mark Moerdler said Microsoft’s quarter helped “set the tone for tech” in a report that was reassuring across the board.
“Microsoft’s pivot to the enterprise and the Cloud delivers value for investors as seen again in this quarter’s results and we expect this to continue for the long term,” he wrote. “We continue to believe that Microsoft is committed to the long game and is well positioned to be great.”
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He has an outperform rating and a $ 365 price target on the stock.
Microsoft shares have dropped 2.7% over the past three months as the Dow Jones Industrial Average DJIA,
dropped 3.2%.
.