Microsoft beat expectations for its top and bottom lines for the quarter that ended September 30. Despite the tech giant’s shares falling after it offered weak quarterly guidance, analysts are still bullish on the stock and remain confident in its growth potential.
“Looking beyond near-term dynamics, we remain constructive as we see the company well positioned to continue to win deals and expand its wallet share within its existing customer base, even in a slower growth environment,” Goldman Sachs analysts wrote in a note Tuesday.
Meanwhile, Morgan Stanley analysts wrote in a note on Wednesday that, despite its weak cyclical areas and guidance, they “remain firmly convicted in the longer-term secular growth story at Microsoft.”
And although Barclays analysts wrote on Wednesday that Microsoft’s quarterly outlook was a “negative surprise” for investors and “shares will likely react negatively in the short term,” the company’s leadership is still managing for profit and revenue in a way that “should ensure relative outperformance.”
Microsoft was one of the top holdings of the Xtrackers Russell 1000 US QARP ETF (QARP) as of June 30. QARP seeks investment results that correspond generally to the performance, before fees and expenses, of the Russell 1000 2Qual/Val 5% Capped Factor Index, a multi-factor index designed to capture exposure to large-cap U.S. equities that exhibit strong quality and value factor characteristics.
The fund aims to identify companies that have strong quality scores relative to their peers and to also look at the value scores of the securities, to avoid those quality companies that are potentially over-priced.
QARP has outperformed the Russell 1000 by 377 basis points year-to-date.
QARP has an expense ratio of 0.19%.
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