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Time of India
3 days ago
- Business
- Time of India
Trump Tariffs and .... How Microsoft is the biggest winner this earnings season for Big Tech
Microsoft Corp. shares are within 1.5% of their all-time high from July 2024, driven by a robust 16% gain in May 2025, the stock's best monthly performance in over three years, according to Bloomberg. The rally reflects a broader U.S. equity rebound and renewed confidence in Microsoft's Azure cloud-computing business, fueled by strong artificial intelligence (AI) demand. Azure's fiscal third-quarter revenue grew 33%, surpassing Wall Street expectations, with non-AI services like databases and storage outperforming, as noted by CFO Amy Hood. The stock's resurgence contrasts with its 2024 performance, when Microsoft lagged behind the 'Magnificent Seven' peers -- Apple, Nvidia, Alphabet, Amazon, Meta, and Tesla -- with a 12% gain, weighed down by concerns over Azure growth and AI competition. In 2025, Microsoft's 9% advance has outpaced most peers except Meta (up 10%), bolstered by limited exposure to President Trump's tariffs and strong Big Tech earnings. Analysts see Microsoft as the biggest Big Tech winner this earnings season. Analysts are optimistic, with TD Cowen projecting Azure's AI-related revenue to soar to $24 billion by fiscal 2026, up from $4 billion in 2024. They raised their price target to $540, implying an 18% upside from Wednesday's close, as reported by Bloomberg. Of 72 Bloomberg-tracked analysts, 66 recommend buying Microsoft, with only six holding neutral ratings and none advising to sell. TD Cowen noted that Azure's mid-30% growth trajectory could drive renewed investor interest in Microsoft. Despite trading at a premium—30 times forward profits compared to the Nasdaq 100's 26 times—some see limited short-term upside after recent sideways trading, per Nancy Tengler of Laffer Tengler Investments. However, Kevin Walkush of Jensen Investment Management remains bullish, citing Microsoft's ability to monetize high-margin AI services. 'Microsoft is probably one of the best long opportunities in AI,' Walkush told Bloomberg, highlighting its capacity for sustained revenue growth. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Trading CFD dengan Teknologi dan Kecepatan Lebih Baik IC Markets Mendaftar Undo Microsoft's Azure platform powers AI tools like OpenAI's ChatGPT, alongside traditional cloud services. The company's strategic AI investments, including partnerships and infrastructure expansion, position it to capitalize on growing enterprise demand. Recent Twitter posts echo this sentiment, with users noting Microsoft's AI-driven cloud dominance and stock resilience, though some caution about valuation concerns given its premium pricing.
Mint
08-05-2025
- Business
- Mint
Shareholdings moves in Q4: Mutual funds load up on 5 mid & small-cap laggards
The investment landscape of the March 2025 quarter (Q4 FY25) saw a notable contrarian move by mutual funds. Amid broader market discussions about stretched valuations, these institutional investors strategically allocated significant capital to a select group of mid- and small-cap stocks. A Mint analysis of mutual fund shareholding data across 1,168 BSE's large-, mid-, and small-cap shows a clear pivot toward underperforming names with perceived turnaround prospects. Five stocks—TeamLease Services, Happiest Minds Technologies, South Indian Bank, Max Financial Services, and AWL Agri Business—stood out for seeing the steepest surge in institutional interest, despite lagging stock prices. A bet despite weak show Small-cap staffing firm TeamLease Services emerged as the top pick for mutual funds in Q4FY25, with institutional ownership surging by 10.9 percentage points to 45.44%—even as the stock plunged 38% during the same period. The company's valuation has become attractive, with its P/E ratio dropping to 32x—far below its five-year average of 100x. Also read Shareholdings moves in Q4: FPIs make bold bets on small-caps and a troubled bank Despite short-term pressures, 92% of analysts polled by Bloomberg suggest a 'buy' or 'hold' ratings for the stock. The pressure on their staffing business is expected to ease further. 'Going into 4Q, management anticipates a marginal decline in headcount due to headwinds in BFSI and slowdown in certain pockets of the general staffing business, which should normalize by 1QFY26," highlighted an Antique Stock Broking research report. The company is expected to announce its results on 21 May. A dark horse Mid-cap player AWL Agri Business witnessed a dramatic rise in mutual fund stake—from a marginal stake in December to 8.47% in March quarter even as its shares dropped 16%. The company delivered 9% year-on-year volume growth in Q4 and notched record annual revenue of ₹63,672 crore. 'We are well-positioned to capitalize on India's shift toward packaged foods," said Angshu Mallick, MD & CEO of AWL Agri Business. Analysts remain positive, with 67% maintaining a 'buy' or 'hold' stance, as per Bloomberg data. Mutual funds also raised their stake in Max Financial Services by 5 percentage points to 39.88%. The stock was up around 3% in Q4. The company, which holds a dominant position in the life insurance space, continues to enjoy analyst backing—100% of Bloomberg-tracked analysts maintain a 'buy' or 'hold' rating. YES Securities expects Q4 margins to expand to 23–24% on the back of operating leverage. However, the stock trades at a lofty 176.6x trailing P/E—twice its five-year average. Future giants? Digital services firm Happiest Minds Technologies saw mutual fund holdings more than double to 8.37%, even as its share price slid 19%. HDFC Securities expects 25% dollar revenue growth in FY25, driven by a revival in digital transformation demand. The stock currently trades at 36x FY26 earnings—below its long-term average of 45x. Their Q4 results will be announced on 12 May. Also read Shareholding moves in Q4: Did retail investors' small-cap love fizzle out? South Indian Bank also drew strong interest, with mutual fund ownership jumping to 8.3% from 3.8%, despite a 7.8% drop in stock price. Now trading at just 5.2x earnings, far below its five-year average of 15.5x, the stock offers valuation comfort. Anand Rathi expects the bank to maintain a 1% return on assets as legacy bad loan pressures ease. Notable exits The March quarter also witnessed significant mutual fund exits, particularly from stocks that had seen sharp rallies. AAVAS Financiers led the outflows, with mutual funds slashing their stake by 14.36 percentage points to 7.93%, despite the stock rising 24%—a clear sign of profit-booking. The hospitality sector faced heavy selling pressure from these domestic investors. Samhi Hotels and Barbeque-Nation both saw mutual fund holdings drop by 5 and 4.5 percentage points, respectively during the quarter. Their share prices tumbled over 30% during this period. Dreamfolks Services, which plunged 44% during the quarter, saw the domestic institutional ownership shrink by nearly 4 percentage points sequentially. Meanwhile, Can Fin Homes registered a 5 percentage point cut in mutual fund stakes, rounding out the list of major divestments. 'Market behaviour reinforces the caution. Small-cap funds posted negative returns in early 2025 and net inflows halved, curbing momentum bidding and redirecting money toward names offering 'growth at a sensible price," notes Sonam Srivastava, founder and fund manager at Wright Research PMS. Taken together—the selective buying pattern, discounted valuations and the regulatory lens—shows that mid- and small-cap allocations are indeed becoming valuation-driven rather than sentiment-driven, she added. 'Mutal funds remain active in the segment, but only where earnings visibility and excitability provide tangible downside buffers." This is the eighth part of a series of data stories on the latest shareholding pattern. Read previous parts of our shareholding serieshere.
