Microsoft (MSFT) could easily go hunting for another
whale of an acquisition with its $130.6 billion in cash, analysts say.
It has a lot of options on where it could look.
"There are lots of different areas that we think Microsoft
could acquire. We think Microsoft will continue to be acquisitive. I think
there is plenty of opportunity for them to continue to expand their cloud
application footprint. If you think about it, they have less than 10% market
share in front office applications. They have over 80% market share in middle
office productivity tools, but less than 10% share in back office as
well," said Piper Sandler Brent Bracelin on Yahoo
Finance Live. "We wouldn't be surprised if they went after
consumer oriented opportunities out there that bolsters advertising as
well."
Microsoft's last major deal came earlier this year, a nearly $20 billion outlay to
scoop up speech recognition company Nuance.
Besides the lofty cash levels, the Microsoft bulls (and there
are many on the Street) had other reason to be impressed yet again on earnings day.
Sales for Microsoft's Azure increased 48% on a constant currency
basis in the fiscal first quarter, quicker than the 45% seen in the fourth
quarter. Operating profit margins rose 200 basis points from a year ago to
44.7%. Sales from Microsoft's Windows OEM basis clocked in with 10% constant
currency growth, compared to a 3% drop in the fourth quarter.
Microsoft shares surged 5% to a record high of
$325.83 in afternoon trading on Wednesday.
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