ADVERTISEMENT

It's time for a reality check on Microsoft's grand turnaround vision (MSFT)

Microsoft has been making some big bets. Now, it needs to show real progress or risk losing the faith of Wall Street.

When Satya Nadella took over as CEO of Microsoft in February 2014, he brought a brand-new playbook to the company. Instead of focusing exclusively on Windows, his Microsoft would take a "cloud-first, mobile-first" stance.

ADVERTISEMENT

Just over three years later, things are looking good. Microsoft stock is hitting all-time highs, as Wall Street responds favorably to the strong and continued growth of the Office 365 subscription productivity suite, and the Microsoft Azure cloud computing service — the poster children for Nadella's post-Windows approach.

And yet, when Microsoft announces its quarterly earnings results on Thursday after the bell, it still has a lot to prove, to Wall Street and to the world. Because while Nadella's vision has led to a reinvigorated Microsoft, the biggest question remains: Will Nadella's big bets on the cloud and mobile grow fast enough to offset its fading old businesses?

If Microsoft can't show clearly that the answer is "yes," Wall Street could lose faith in Nadella's master plan.

ADVERTISEMENT

Here are the major things to look out for when Microsoft announces earnings on Thursday:

In other words, investors are on board with Nadella's vision for a world where Microsoft weathers the shrinking PC market by dominating the worlds of the cloud and business software.

But these older businesses still account for a tremendous chunk of Microsoft's revenue. And while the cloud is growing fast, investors will be looking for signs that this growth will translate into a big enough, high-margin business to offset that shrinkage.

We'll be covering Microsoft's earnings live, so make sure to come back Thursday after the bell. Wall Street analysts are expecting Microsoft to report earnings of $0.70 a share on revenue of $23.62 billion.

FOLLOW BUSINESS INSIDER AFRICA

Unblock notifications in browser settings.
ADVERTISEMENT

Recommended articles

Detained Binance executives sue Nigerian authorities for human right violation

Detained Binance executives sue Nigerian authorities for human right violation

Nigeria's central bank increases minimum capital base for banks

Nigeria's central bank increases minimum capital base for banks

Sony’s creators convention redefines the creative landscape for content creators

Sony’s creators convention redefines the creative landscape for content creators

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

10 African countries with the lowest life expectancy according to the World Bank

10 African countries with the lowest life expectancy according to the World Bank

Kenyan women are more obese than their men - here’s why

Kenyan women are more obese than their men - here’s why

Africa’s richest man Dangote stands between Europe and $17 billion in revenue

Africa’s richest man Dangote stands between Europe and $17 billion in revenue

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

ADVERTISEMENT