Microsoft’s shares are in the bear market, but it presents a major buying opportunity. The company reported strong Q2 earnings despite the decline. In fact, its shares rebounded 54.36% to reach an all-time high of $555.45.
Despite this, Microsoft is trading at low valuations due to concerns over its capital expenditure (CapEx) strategy and Return on Purchase Order (RPO) quality. However, these concerns are overblown, as the company’s commercial RPO contract worth $625 billion and strong cash generation ensure continued investment and future profitability.
The EBITDA growth since 2021 has been significant, with a 116.86% increase. The Q2 revenue is up 17% year-over-year, and operating margins remain resilient at 47%. This suggests that Microsoft’s business model is robust and capable of supporting long-term growth.
Given the low valuations and strong fundamentals, many investors see this as an opportunity to buy in at a discount and potentially reap benefits down the line.
Source: https://seekingalpha.com/article/4873886-microsoft-is-in-a-bear-market-which-is-creating-a-major-opportunity