Original title: stock price hit an all-time high! Microsoft CorpMicrosoft Corp, a well-known investment bank who announced the big price increase of Microsoft 365, soared by 15%.
Source: FX168
Us technology giant Microsoft Corp (Microsoft) has announced an increase in the pricing of the commercial version of Microsoft 365.This is the first real price increase since Microsoft Corp launched the Office 365 a decade ago. A number of investment banks believe that Microsoft Corp Office 365 price increase will boost the company's revenue. Microsoft Corp's share price hit an all-time high on Friday.
Dan Ives, an analyst at Wedbush Securities Securities, a well-known US investment bank, said in a report on Friday that Microsoft Corp's move to raise the price of Office 365 is expected to generate at least $5 billion in revenue by 2022. Ives believes that the price increase of Office 365 is a wise strategic move to make investors more confident that its share price will continue to rise.
Microsoft Corp announced an increase in the pricing of the Microsoft 365 commercial edition on Thursday and said the price increase would take effect in six months' time. Microsoft Corp said that the number of commercial Office 365 users reached 300 million, and more than 250 million monthly active users were included in Teams software. In order to reflect the continued increase in product value, it will increase the prices of Office 365 and Microsoft 365 solutions.
Microsoft Corp said that this is the "first significant price update" since the launch of Office 365 10 years ago, with the price increase of the commercial version ranging from 9% to 25%, effective within half a year, and the prices of the education and consumer versions remain unchanged.
Updated Microsoft 365 pricing: Microsoft Business basic Edition ($5 to $6 per person); Microsoft 365 Business Premium Edition (from $20 to $22); Office 365E1 (from $8 to $10); Office 365E3 (from $20 to $23); Office 365E5 (from $35 to $38); Microsoft 365E3 (from $32 to $36).
It is reported that when it was launched in June 2011, Office 365 included Word, Excel, PowerPoint, Outlook, Lync, Exchange and InfoPath.
As prices rise, Microsoft Corp also announced that in the next few months, it will expand audio conferencing functions to add unlimited dialing capabilities for enterprise, commercial, frontline and government versions of Microsoft Teams conferences, provide subscription support for more than 70 countries, and support interactive support in 44 languages and dialects.
Microsoft Corp's new policy was favored by the market. Microsoft Corp hit an all-time high of $305.66 a share on Friday, closing at $304.36 on Friday, up 2.56%.
Microsoft Corp announced that it will raise the price of Office users from next year, sending Microsoft Corp's share price up 5% in the past two trading days, an all-time high, according to an article on the famous US business website Business Insider on Friday.
Ives said in a report on Friday that Microsoft Corp's share price rally was likely to continue, raising his target share price to $350 from the previous $325. This is 15% higher than Friday's closing price, maintaining a "buy" rating on Microsoft Corp's shares.
Ives said: "the price increase of Office 365 in 2022 is a wise strategic move and may increase the revenue of Redmond (Microsoft Corp headquarters) by more than US $5 billion in 2022. Let investors have more confidence that its share price will continue to rise in the future. "
After the recent surge in share prices, the market capitalization of Microsoft Corp has grown to US $2.287 trillion, compared with Apple Inc.The company's $2.45 trillion is only $163 billion lower.
Microsoft Corp's market capitalization broke through the $2,000bn mark in June 2021, making it the second company in the US to enter after Apple Inc broke through $2,000bn last year.
Microsoft Corp's market capitalization reached $1,000bn for the first time in 2019, 33 years after Microsoft Corp went public. But it took Microsoft Corp only about two years to rush from $1 trillion to $2 trillion.
Ives also named the growth potential of Microsoft Corp's cloud business Azure cloud service platform, believing that the business would not be affected by the slowing down of the epidemic.
Wade Bush believes that as companies continue to transition to a cloud-based architecture, the cloud business growth of Microsoft Corp's Azure platform also helps push stock prices higher. Ives said that while many people thought Microsoft Corp's business growth would slow after the outbreak, this was not the case.
Ives said in the report that Microsoft Corp has the ability to learn from Amazon.Com IncGained market share in AWS cloud services in part because of the attractive Office 365/Azure portfolio agreement offered by the company.
Ives concluded: "Microsoft Corp is still our most promising large cloud technology company, and we believe that as Wall Street further appreciates Microsoft Corp's cloud transformation story, Microsoft Corp's share price will rise by the end of the year."
Several investment banks are bullish on Microsoft Corp's share price.
Except for Wade Bush, UBSUBS and Mizuho also raised Microsoft Corp's target price to $350 from $325 and reiterated their "buy" rating.
GE Gregg Moskowitz, an analyst at Mizuho Securities, maintained his "buy" rating on Microsoft Corp's shares and raised his price target to $350 from $325.
Karl Keirstead, an analyst at UBS, said Microsoft Corp's announcement of an increase in the pricing of the commercial edition of Microsoft 365 was the biggest increase in a decade, making it more confident about Microsoft Corp's growth prospects. Keirsted believes that Microsoft Corp's price increase is reflecting the true value of the product.
Gregg Moskowitz, an analyst at Mizuho Securities, said Microsoft Corp's "unexpected" announcement of an increase in the pricing of the Microsoft 365 commercial edition for the first time will have a significant financial impact in fiscal year 2023 and beyond.
Moskowitz said that the basic solution has a higher increase compared to the advanced software solution, which is expected to drive the adoption rate of high-end products.
Moskowitz insists that Microsoft Corp "has more room for growth in the middle and later stages than many people realize now."
Mark Moerdler, an analyst at Bernstein, the investment bank, said that as price increases usually affect customers' contract renewal prices, the benefits are expected to last for one to three years and generate low-to-middle-digit revenue growth for commercial Office 365 businesses.
Moerdler said that the price increase shows that Microsoft Corp is more and more confident in this product line and is confident that a solid moat has been built. It is expected that if Microsoft Corp further adds more new functions in the future, there may be additional room for price increases.
In addition, JPMorgan Chase & Co(J.P.Morgan) analyst Mark Murphy raised Microsoft Corp's share price target to $310 from $300 and maintained his "overweight" rating on Microsoft Corp's stock.