MSFT Pre-earnings Analysis
Chart done on hourly timeframe. We’re less than a month into 2024 and Microsoft has already challenged Apple to be the most valuable company in the world. The new accomplishment is well deserved considering Microsoft’s stellar history and performance, but it will be tested this week as they report quarterly earnings. Expectations are high from the company because of their involvement in artificial intelligence and OpenAI. With demand for generative AI soaring, Microsoft is considered a top leader so they’re expected to reap the benefits. Net income is expected to come in at $20.6B ($2.77 per share), compared to $17.4B ($2.20) same quarter last year. Revenue is also expected to grow 16% YoY. Despite the aggressive projections, we expect Microsoft to surpass expectations, as they’ve down consistently for years.
Option chain analysis:
MSFT’s option chain that expires this week is reflecting a 54% implied volatility, which translates to about a $19 move. This means if Microsoft meets expectations then we can expect them to move to about 430.00, but if they miss then the downside price target is 390.00.