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Microsoft’s Boundless Bounty, Dreamliner Nightmares & Disney’s Mattel Cartel

Microsoft’s Boundless Bounty, Dreamliner Nightmares & Disney’s Mattel Cartel

Romeo Juliet invest in Microsoft below $200 meme

Microsoft’s Sweet Sales Soliloquy

But Microsoft (Nasdaq: MSFT)! What light through yonder Windows breaks? It is quarterly earnings, and Azure is the sun!

Arise, fair sun, and kill the envious cloud computing competitors who are already sick and pale with grief that thou, the OG tech company, art far more fair than they.

Oh, Great Ones! Is your vestal livery but sick and green because you aren’t invested in Microsoft yet? Then cast it off, for none but fools do wear it!

What I'd miss keep Greatness flowing meme

Let us sideline the Shakespearean soliloquy for but a moment and, as the great Don Henley once sang, get down to the heart of the matter.

One week ago today, I told you about how Microsoft’s acquisition of Activision Blizzard (Nasdaq: ATVI) was yet another reason to own MSFT stock.

Ol’ Softy, after all, is finally creating what so many companies before had tried to build but failed: The Netflix of video games.

Now, I know that more than a few of you don’t give a rat’s arsch about video games. Great Ones are more of a “Show me the money!” kinda breed. Well, this morning, Microsoft did just that.

The software giant stepped into the earnings confessional to report a double beat and raise. Let’s look at the numbers:

  • Earnings per share: $2.48 reported versus $2.32 expected.
  • Revenue: $51.7 billion reported versus $50.7 billion expected.

And, as I so elegantly soliloquized earlier, cloud revenue was the star of the show. Azure revenue surged 32% year over year, pushing overall Microsoft Cloud revenue to $22.1 billion.

But that wasn’t the end of it. No sir.

Microsoft said it expects current-quarter revenue of $48.9 billion — up from $41.7 last year and well above Wall Street’s target for $48.1 billion in revenue. How’s that for unexpected growth in a time of great market and economic uncertainty?

One might even call Microsoft a bellwether for the tech sector as a whole. Oh, wait. Someone (or several someones) did…

We believe this can start to change the sentiment tide in tech … [earnings were] solid and robust and hopefully it will ease Wall Street concerns on tech earning power.

David Wagner, portfolio manager at Aptus Capital Advisors.

I very much think investors should feel confident, and you saw that in the rebound in the stock after management commentary and then guidance

Mark Moerdler, Bernstein analyst.

Heck, Jefferies Analyst Brent Thill went so far as to say that Microsoft helped “save the Nasdaq.”

So, Microsoft is building the Netflix of video games, just reported a double-beat-and-raise quarter and is apparently the savior of the Nasdaq and tech sector.

Oh, that she knew she were!

But wait! There’s more!

Is this a financial e-zine or an infomercial?

Yes.

So, MSFT stock initially trended lower along with the broader market in premarket trading. However, the impact of today’s earnings report wouldn’t be held in check.

MSFT stock jumped more than 4% on the news and reclaimed support at its 200-day moving average. You just know that got all those technical traders excited, but it should get you excited as well.

MSFT stock is now perched on price support near $300 and its 200-day moving average. In other words, if you are a long-term buy-and-hold investor looking for a signal to buy MSFT stock … well, here’s yer sign.

There may be some additional market volatility in the coming month, so short-term traders beware. But, overall, you won’t go wrong with MSFT stock in the long run.

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Quick and Dirty

Pretty Pretty Princesses

Mattel wins Disney Princess licensing rights

Toymaker Mattel (Nasdaq: MAT) shot up faster than a Hot Wheels car cruising down an Energy Track this morning after announcing that it won back the right to make toys based on The Walt Disney Company’s (NYSE: DIS) princesses.

Mattel lost these licensing rights back in 2016 to rival toy tinkerer Hasbro (Nasdaq: HAS), after which it struggled for years to recoup the revenue from its Disney toy tie-ins. That’s why today’s global licensing win is such a game-changer for MAT investors.

With Mattel developing Disney dolls again, investors can expect fresh cash infusions whenever the House of Mouse makes new princess movies.

And considering Disney’s coming out with live-action remakes of all its cult classics — including Ariel, Snow White and Rapunzel just in the next few years — that’s a lot of potential profit heading Mattel’s way … and a lot of Disney Princess Barbies heading your way.

Boeing Stops The Bleeding

Longtime Great Stuff Pick Boeing (NYSE: BA) suffered a beat down today after reporting a loss of $7.02 per share in the fourth quarter — well under Wall Street’s estimate for $0.29 in earnings.

On the surface, this looks bad for BA investors. But here’s the thing: Boeing’s earnings hit is largely due to production and delivery delays and for its 737 MAX and 787 Dreamliner jets. It’s not that airlines aren’t ordering Boeing’s planes — quite the opposite.

Boeing just couldn’t keep up with deliveries last year due to a series of factory defects and regulatory snags. And to offset these delays, Boeing compensated customers to the tune of $3.5 billion Boeing bucks.

Now, what didn’t make headlines today is the fact that Boeing stopped its cash bleed for the first time since early 2019. It now expects to generate positive cash flow for all of 2022, backed by the broadening recovery of the commercial jet market and much higher deliveries.

I understand this might be a moot point for some of you Great Ones. While I have a bullish long-term outlook for BA stock, Boeing’s short-term turbulence might be too much for some of you. If that’s the case … then do whatever is right for your portfolio and your investment strategies.

Starbucks Sows Its Wild Oats

Starbucks two brand new energy drinks

Dunkin’ Donuts devotees will be happy to hear that Starbucks (Nasdaq: SBUX) has two brand-new beverages they can trash talk. Nothing screams tribalism more than morning carafes of coffee, right?

But what if I like both brands?

Both? Both are good … but don’t say that around certain bean brewers. They’re a prickly sort.

Anyway, Starbucks has launched its first energy drink lineup, called Baya Energy. Not only are these drinks chock-full of caffeine, but the Pineapple Passionfruit, Raspberry Lime and Mango Guava flavors all sound like quite the colon cleansers.

Speaking of, if certain stomach sensitivities have you skipping the Starbucks line, you may want to try out the company’s new grab-and-go Frappuccinos made with oat milk. This isn’t the coffee company’s first foray into dairy-free drinks, nor will it be the last … unless, for some reason, consumers find them udderly undrinkable. Time and taste tests will tell.

Sweet T Went Sour

Good news! AT&T (NYSE: T) is still the same, bungled-up mess of a dinosaur it’s always been — and you only need look in today’s earnings announcement for more proof.

What?! AT&T just reported a double beat; that’s no mess!

Remember, AT&T is in the middle of selling off WarnerMedia and Xandr, its digital advertising business. These segments won’t be part of the company for much longer … but you try telling that to AT&T’s management.

The telecom still gave out earnings and revenue guidance, including its divested interests — and even then, those predictions fell short of analysts’ expectations. What this means is that if any of you T investors actually want to know how AT&T’s actual business will perform for the rest of 2022 … you might be waiting alongside AT&T’s management to find out.

GM’s Greatest Mission

GM invest in Tesla EV market share

General Motors (NYSE: GM) just threw down a truly electrifying gauntlet, Great Ones.

This morning, the automaker announced its plan to invest $6.6 billion through 2024 to increase electric vehicle (EV) production and build a booming EV battery plant in its home state of Michigan.

GM is so confident in this new investment that it believes it’ll become the leading EV maker by “mid-decade.” By my calculations, that’s just *checks calendar* three years from now. And therein lies the rub.

I’m not saying it’s impossible for GM to overthrow reigning EV titan Tesla (Nasdaq: TSLA) by 2025. It’s just highly improbable. But then again, GM is known for its general madness … I mean, does anyone remember that Lumina APV? No? There’s a reason for that.

Poll of the week

Poll day is upon us once again, Great Ones! Your midweek reward for … well, simply making it to poll day. Pat yourself on the back just for that!

With GM predicting the EV market future like a regular ol’ Nostradamus, it’s time for you to sound off on GM’s plans to take on Tesla. It’s a bold strategy, Mary Barra, let’s see how it plays out.

Like I said above (unless y’all skimmed right on by that greatness), overtaking Tesla as the No. 1 U.S. EV maker isn’t impossible … just improbable with GM’s timeline, in my opinion

Your own opinions on GM’s EV excellence might — should? — be different. That’s kinda the whole reason behind these polls, but I digress…

Click below to chime in: Will GM overthrow Tesla by 2025?

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By the way, if you were wondering how last week’s poll shaped up, listen up!

After last week’s Activision acquisition, we asked if you were down with MSFT — yeah, you know me!

In what might be our most widely held pick so far, a whole 46.7% of you said you have a micro stake in ol’ Softy, while MSFT has literally paid for 3.3% of you to retire like the tech barons you are.

Another 31.7% of you are just waiting for the right time to jump the gun, and if that’s the case, I hope y’all enjoyed this past week’s fire sale…

Last but not least comes the 18.3% of you who are anti-Microsoft for one reason or another. Let me guess: Was it Clippy? I bet it was Clippy. That unhelpful paper-clipping son of a…

Anyway, if you have more thoughts in your brain box than a mere poll may satisfy, write to us! We’ll be around … it is email, after all.

GreatStuffToday@BanyanHill.com is where you can reach us best. And here’s where else you can keep up with the Greatness:

Until next time, stay Great!

Regards,
Joseph Hargett. Editor of Great Stuff

Joseph Hargett
Editor, Great Stuff

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