Microsoft’s Intelligent Cloud segment licenses SQL, Windows Servers, Visual Studio, System Center and related Client Access Licenses; GitHub provides a collaboration platform and code hosting service for developers; Nuance provides health care and enterprise AI solutions; and Azure, a cloud platform. It also offers enterprise support, Microsoft consulting, and nuance professional services to assist customers in developing, deploying and managing Microsoft server and desktop solutions; and training and certification on Microsoft products.
The More Personal Computing segment provides Windows original equipment manufacturer (OEM) licensing and other non-volume licensing of the Windows operating system; Windows Commercial, such as volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; and Windows Internet of Things. It also offers Surface, PC accessories, PCs, tablets, gaming and entertainment consoles, and other devices; Gaming, including Xbox hardware and Xbox content and services; video games and third-party video game royalties; and Search, including Bing and Microsoft advertising. The company sells its products through OEMs, distributors and resellers; and directly through digital marketplaces, online stores, and retail stores.
The software giant posted first-quarter fiscal 2023 results that beat Wall Street expectations on the top and bottom lines, though cloud revenue came in lower than expected and the company’s quarterly guidance fell short of expectations as well. Microsoft plans to moderate its operating expense growth in the next few quarters until demand heats back up.
Microsoft stock comes with a 1.11% dividend. Goldman Sachs has set a $315 price target. The consensus target is $296.91, and shares last closed at $238.73.
Qualtrics
This more off-theadar idea has among the biggest upside potential of all the Goldman Sachs Conviction List stocks and is a great idea for investors who are more aggressive. Qualtrics International Inc. (NYSE: XM) operates an experience management platform to manage customer, employee, product and brand experiences worldwide. It was founded in 2002 and is headquartered in Provo, Utah. Qualtrics is a subsidiary of SAP America.
The company offers the Qualtrics Experience Management Platform, a system of action that guides users with specific instructions for improvement and automated actions to improve experiences, as well as for listening, understanding and taking action on both structured and unstructured data.
Qualtrics also provides professional services that primarily consist of research services, through its DesignXM, which allows customers to gain market intelligence, as well as implementations, configurations and integration and engineering services to help customers deploy its XM Platform.
The analysts view Qualtrics as a market leader in customer experience, a segment of the customer relationship management total available market that is growing in importance as customers leverage new pools of interactions data to optimize their own unit economics. Analysts expect Qualtrics to benefit from net new budget as well as consolidation of spend from a long tail of fragmented vendors as a function of its technology breadth and depth, with key differentiators being its ability to process unstructured data and its integration with other action-oriented workflow tools.
The $18 Goldman Sachs price objective compares with the $16.28 consensus target for Qualtrics stock and the most recent close at $10.10.
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