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What to watch for in Microsoft's Q4 results

Investors will watch for these three factors from the tech company's Q4 earnings report.

Trader Source: Bloomberg

Microsoft’s Q4 earnings report on July 18 will be closely monitored by investors to see if the tech company will continue to beat expectations after its successful Q3 earnings report.

Analysts expect Microsoft Q4 earnings to increase

Microsoft's stock has outperformed throughout 2019 with year-to-year-growth of 36%. With its bullish run in the US stock market, Microsoft’s market capitalisation topped $1 trillion. Microsoft predicts its Q4 revenue will be in the range of $32.2 billion-$32.9 billion. That estimate falls in line with the Zachs’ Equity Research expectation of $32.73 billion, an increase of 8.8% from Microsoft's $30.6 billion Q3 revenue.

Cloud computing could continue to help Microsoft’s Q4 revenue

Microsoft's Q3 earnings were boosted by strong cloud computing revenue. Now the tech company hopes that its cloud computing division will increase Microsoft’s Q4 earnings. In its Q3 earnings, Microsoft’s cloud revenue was $9.6 billion, a surge of 41%. Investors will see if Microsoft’s successful cloud division can maintain the corporation’s revenue growth.

Partnership with Oracle could impact Microsoft's Q4 profits

Microsoft’s Q4 earnings from cloud technology could further increase after the corporation recently announced a partnership with Oracle. Microsoft’s Azure and Oracle’s Cloud will be connected so users can store data on both cloud services. The collaboration between the former rivals is likely meant to challenge Amazon’s Web Services. Scott Guthrie, Microsoft Cloud’s executive vice-president, touted the partnership between the tech companies in a statement.

‘With Oracle's enterprise expertise, this alliance is a natural choice for us as we [Microsoft] help our joint customers accelerate the migration of enterprise applications and databases to the public cloud,’ said Guthrie.

Investors will watch Microsoft’s Q4 earnings report to see if the tech company’s earnings and revenue will be helped by investment in cloud computing and strategic partnerships.

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