The AI ​​bull market is not letting up. Microsoft with a historic peak

Microsoft shares hit an all-time high on Tuesday after the software giant announced a pricing strategy to add generative AI functionality to its flagship Microsoft 365 software, which includes Word, PowerPoint, Excel, Outlook and Teams.

The company announced that Microsoft 365 Copilot software will be offered to business customers at $30 per month for the user.

The giant's shares are growing

"Copilot sparks creativity in Microsoft Word, analyzes data in Excel, designs PowerPoint presentations, organizes Outlook inbox, summarizes meetings in Microsoft Teams - whether you attended or not - and much more” – reported Microsoft.

Microsoft shares rose 4% to $359,49 on Tuesday, which was a new record closing. During the session, the stock set an intraday high at $366,78.

MSFT share price has increased by 50% since the beginning of the year, it was 41% in annual terms. The company is listed with a price/earnings ratio of 39x and a forward P/E of 34.

Sales in 2023 are expected to amount to USD 211,19 billion, in turn in 2023 could rise to 235 billionand in 2025 to USD 265 billion. On the other hand, the CAGR of revenues for the last 5 years is 14,41%, falling from over 16%. achieved in March 2022. This means that the current valuation of the company, to be maintained, must be based on a significant improvement in the dynamics of revenue growth, and thus also profits.

5Y CAGR EBITDA MSFT is 17,83%, which means a decrease from 24,68% in September 2021. The PEG ratio, i.e. price/earnings in relation to EPS growth, is 3,25 and is the highest since February 2021.

Nasdaq 100 highest since January 2022

The broad Nasdaq 100 added another gain yesterday, approaching 16000 points. This means an increase of almost 50% since the beginning of the year, and there is still about 5% left to improve the historical peak. At this pace, it is possible that the record could be reached in July, which may also be influenced by the Fed's decision. Nevertheless, returning to the AI ​​boom, we will now probably move from buying promises of business growth to seeing how much companies actually manage to sell AI-based products and how much they actually earn from it.

Netflix and Tesla results

Results will be released after the session today Netflix and Tesla, which may also affect the Nasdaq 100 index in the near future. The market expects Netflix's EPS to be $2,85 and Tesla's EPS to $0,82.