My PPS prediction. There is nothing to imply the growth of cloud services will slow enough to not more than offset the decline in PCs. Any bright spot in the Surface sales would be icing. Without a new CEO I think the stock settles back down to $36-8 pretty quickly though. I have to figure shorts will wait til the post earnings bump to short. Seems like very little odds of downside for earnings anyway. Am I wrong?
depends on earnings. i dont see very much volatility in the estimates for MSFTs earnings(64-77cnts/sh) im concerned about the fact fellow tech stock intel sort of took a hit last week when it announced fairly decent earnings and sales. it was starting to recover at the end of the session though. intel actually has a better PE than microsoft at this point and i dont think it should since microsoft has better growth potential. i think for it to hit 40 after earnings one of two things would have to happen: either earnings came in at .85+ or MSFT would have to announce a new CEO who was an outsider with a good track record at managing transition.
MSFT shares will stay at current levels as long as there is speculation about a new CEO. Next quarter, the will be speculation about the end of XP. Sell on the hype! Then by July, investors will have to face reality when the new CEO gets stuck with all of Microsoft's problems and and weak sales numbers. Microsoft's only hope is a version of Windows 9 that's 100% compatible with XP in the next 3 months.
I'm inclined to sell some post earnings and maybe post CEO if that announcement comes when it's supposed to. I agree that there will be some lows for 2014, but to me that equals some buying opportunities. However, a version of Windows 9 that's 100% compatible with XP in the next 3 months being their only hope? That's utter baloney. Windows 7 is the OS of choice for business people anyway. I'd much rather see them provide regular updates to Windows 7 while maintaining a Windows 9 (or whatever they'd choose to call it) for consumers. I think that's also not plausible but their business model is moving away from selling operating systems, so why would they re-create the wheel when Windows 7 is the best OS they've made to date?