5 Latest Earnings That Surprised Wall Street

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Microsoft Corporation (NASDAQ:MSFT) reported its FQ4 results on July 26. The company announced Q4 GAAP earnings per share of $2.23, missing market consensus estimates by $0.07. The revenue of $51.87 billion jumped 12.4% year over year, below Street forecasts by $490 million. The company announced that Windows revenue declined by more than $300 million. However, Microsoft Corporation (NASDAQ:MSFT) returned $12.4 billion to shareholders in terms of buybacks and dividends during the second quarter, up 19% year-over-year.

On July 27, JPMorgan analyst Mark Murphy lowered the price target on Microsoft Corporation (NASDAQ:MSFT) to $305 from $320 and kept an Overweight rating on the shares. The company reported a “better-than-feared” FQ4 and guidance for fiscal 2023, the analyst told investors in a research note. Microsoft Corporation (NASDAQ:MSFT) removed the word “healthy” from its double-digit growth guidance and reassured that hiring will decrease, and the analyst expects “modestly downward estimate revisions”. However, he sees the degradation as gradual and comparatively limited in severity versus the overall tech space. Microsoft Corporation (NASDAQ:MSFT) is the “best house in a gradually deteriorating neighborhood”, the analyst added.

Among the hedge funds tracked by Insider Monkey, 259 funds were bullish on Microsoft Corporation (NASDAQ:MSFT) at the end of March 2022, compared to 262 funds in the last quarter. Chris Hohn’s TCI Fund Management held a notable stake in the company, consisting of 17.2 million shares worth $5.3 billion. 

Here is what Carillon Clarivest Capital Appreciation Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2022 investor letter:

“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Microsoft (NASDAQ:MSFT) reported positive results driven by personal computing strength, but analysts were especially positive on its growth outlook for its Azure cloud-computing services.”