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What will be Microsoft’s fiscal 2021 3rd quarter earnings?

Started: Feb. 6, 2021, 7:07 p.m., Closed: April 28, 2021, 6:28 p.m.
Started: Feb. 6, 2021, 7:07 p.m., Closed: April 28, 2021, 6:28 p.m.

What will be Microsoft’s fiscal 2021 3rd quarter earnings?



Current consensus
0.00%
0.00%
7.33%
29.00%
52.67%
11.00%
6
Narayanasamy
March 9, 2021, 9:50 a.m.
Answer:
Below $10 B

$10 B - $12 B

$12 B – $14 B

$14 B – $16 B

$16 B – $18 B

Over $18 B

Possibility:
0%

0%

0%

17%

80%

3%


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Alex
Feb. 17, 2021, 11:25 a.m.
Answer:
Below $10 B

$10 B - $12 B

$12 B – $14 B

$14 B – $16 B

$16 B – $18 B

Over $18 B

Possibility:
0%

0%

0%

0%

70%

30%

There is no point to extrapolate by similar quarter of past years because quarantine have changed situation dramatically. We should extrapolate by quarters from covid beginning. If we look this way, Microsoft earnings less than 16B would mean earnings growth by 3%, meantime this growth in covid period by quarters was 20% average. If we take last couple of years, average Microsoft quarter earnings growth was 7%. Is it realistic that 3% growth could appear in current circumstances? To analyze properly, we should look not only at fundamental analysis, but at business analysis too. Digital business depends on data. New products and improvements for existing ones are created by UX, but UX can't do it without data. UX is always searching for problems and creating solutions. Future is in the hands of those who have data. In this sense Microsoft has extremely strong position because it has huge sources of data. It is enough to look at the latest news and what Microsoft owns. Microsoft has many digital platforms like Github or LindedIn. It owns Bing and is working with Yahoo. Allegedly independent and consumer-privacy guarding search systems are working with Microsoft. Part of Qwant is based on Azure. There is no certainty what data is leaking there. Qwant is commercializing itself with Microsoft Advertising. The same applies to DuckDuckGo. According to the latest news, Microsoft is thinking about buying Pinterest ( https://www.businessinsider.com/microsoft-tried-buy-interest-billion-tech-biggest-deal-report-2021-2 ). Thus Microsoft is turning into extremely huge owner of platforms of different kinds. Platforms is the place where data is extracted. Thus this is not just about direct Microsoft's products like Teams. Even if we talk about its direct products, they are success stories too. Global quarantine was a gift of the god to Microsoft Teams. It had user growth from 20 millions in 2019 November to 115 millions in 2020 November ( https://www.businessofapps.com/data/microsoft-teams-statistics/ ). In fact, this is not just current sales. Every new customer, by using platform, is generating new data, on base of which Microsoft can create new products and improve existing ones. In fact, Teams is a field, where new users are seeds, from which new products will grow, and probably existing ones are improving already. Further, these improvements will be implemented and products will attract new customers again. This is how the system works. Data is extracted in all ways and products are being developed in a way that could be useful to users and, on the other hand, could generate new data for the company. Now Microsoft Teams are presenting new feature where AI can detect a condition of a conference listener, whether he is satisfied or not ( https://www.newscientist.com/article/2267147-microsoft-teams-ai-could-tell-you-who-is-most-enjoying-your-video-call ). This is about psychological portrait creating and it would be naive to think that Microsoft is not collecting this data (even if they will deny it). Microsoft is AI-oriented business. Which is not surprising because AI development and learning depends on big data and infrastructure that Microsoft is developing too. Before GPT-3 appeared, Microsoft had the most powerful AI model Turing-NLG. With GPT-3 Microsoft got exclusive license to access GPT-3 source code ( https://www.technologyreview.com/2020/09/23/1008729/openai-is-giving-microsoft-exclusive-access-to-its-gpt-3-language-model ). Microsoft established itself in this domain and has a strong position in it. It has its own know-how, its technology. AI is the future, and Microsoft will retain its strong position for years ahead. Also Microsoft expands its businesses and this will only make its position stronger and will widen data extraction. Volkswagen and GM have a deal with Microsoft about autonomous cars and AI application in there ( https://uk.pcmag.com/cars-auto/131690/volkswagen-chooses-microsoft-azure-for-its-self-driving-software ). Volkswagen owns brands like Audi, Bentley, Bugatti, Lamborghini, Porsche, Seat, Skoda. Therefore, Microsoft is stepping into automotive market as a whole, not only in one company. Talking about current moment, apparently it has strong growth already. New products are being developed at a rapid pace. For example, Teams are already introducing a new opportunity to familiarize with new materials before conference call ( https://www.techradar.com/uk/news/microsoft-teams-is-getting-a-huge-upgrade-that-could-change-how-your-business-works ). It seems logical and comfortable, and probably was created on a base of existing user experience (its data). Microsoft is introducing a new product Viva, which will attract new people, create new activity and new data, also will open new opportunities for monetizing. Microsoft is on the wave now. Summa summarum, I don't see why in such conditions growth should be less than usual even comparing to pre-covid time when average growth was 7%. Therefore, probably it will be more than 16B.

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Jurgis
Feb. 6, 2021, 8:21 p.m.
Answer:
Below $10 B

$10 B - $12 B

$12 B – $14 B

$14 B – $16 B

$16 B – $18 B

Over $18 B

Possibility:
0%

0%

22%

70%

8%

0%

It looks like Microsoft's earnings are not very seasonal, so they should be similar to q2 earnings.

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