To the extent that Microsoft Reports Earnings, I focus on cloud computing

Take the

An old man, but a good one to say. can it be? Eddie stable. In one way or another, my twenty years became my fifty. Somehow, be shocked that Dwight Gooden is younger than me, yet the National League toast … has turned into a shock when I can read anything without looking for my glasses. For most of my career, since I went public in 1986 (another Gooden reference?) … there was Microsoft (MSFT). The Windows. Office. Always useful, but the story continues. Well beyond.

Tonight is evening

Microsoft will announce the company's third fiscal quarter tonight when the two ringtones on 11 Wall Street and Times Square will stop ringing. The street is looking for a $ 1 EPS on a $ 29.84 billion business figure. If it is realized, it will be an increase of one year on the other of 11.3%, a growth well above the broader expectations for the S & P 500.

For me, a long time trader this name, the focus should be on cloud computing, as it should now be for the software industry. Yes, recurring revenue products such as those already mentioned are valuable performance drivers. Yes, many are betting on games, but the game has been tough this year. A more buoyant February was followed by a further weak decline in sales in March in this sector. That said, success will be evaluated for Microsoft. Azure will determine the path that the stock price will follow. So let's focus on that.

Cloudy weather

Last year, Brent Bracelin, a KeyBanc analyst, said the subscription-based subscription-based APR was $ 12 billion, while he believed the APA subscribed for Office 365 exceeded 20 billion. In the same vein, Jennifer Swanson Lowe, an analyst at UBS, estimates that, according to Barron, Microsoft's revenue for 2019, as well as those of Abobe (ADBE) and Salesforce (CRM) would exceed industry expectations. Then also last week, Morgan Stanley's Keith Weiss named Microsoft as the "best risk / benefit in software". So … the community of analysts is convinced. Are we? It is more important. Analysts are fine, but unlike them, when we make a mistake, we lose money.

I am attentive to two points about the Microsoft cloud. One of them is the speed with which the Azure hybrid cloud for businesses is growing. How well do companies find this offer interesting compared to the main competitor, the Amazon AWS Service (AMZN)? This brings us to the Pentagon's JEDI program. Last week, Microsoft revealed two data centers designed and created solely for classified information. Do not forget that Amazon has already been authorized to host top secret data for the CIA and DOD, while Microsoft is still waiting for this authorization. The DOD JEDI program, which is the cloud computing contract, is worth $ 10 billion and has become a winner of all kinds of playoffs. The last two competitors are Amazon and Microsoft, after IBM (IBM) and Oracle (ORCL) were eliminated and Alphabet (GOOGL) voluntarily abandoned. We will need to hear comments on this.

Table

There is obviously a lot to like here. Whether relying on the blue Pitchfork or the orange cup with grip, both have been favorable throughout 2019, the escape of this grip has probably grown more recently. As you can easily see, Money Flow was robust, while Daily MACD and Relative Strength were almost too robust. Maybe overbought.

As I said, I love Microsoft. That being said, we are getting closer to my goal of $ 132. I would not be surprised to see a reflex in both directions after the call tonight. That said, the cloud is the future (along with 5G) and Microsoft is a major asset in providing this cloud to US companies. I would think these stocks continue to rise, even if there is a series of profits to be made tonight.

Microsoft

Target price: $ 132

Add: $ 112

Panic: $ 103

Note 1: I have enough exposure, but a trader interested, but not willing to pay the current prices, could target the next season of results here …..

– Sale of an MSFT valued at $ 115 in July (value: $ 1.73)

– Sell an MSFT of $ 110 in July (value: $ 1.02)

Net rate: $ 2.75

Note 2: Trade here will have pocketed $ 275 in advance. In exchange, the trader accepted the risk of having to buy 100 MSFT shares at $ 115 and perhaps 100 other shares of MSFT at $ 110 in July. Worst case … the trader eventually acquires 200 shares of MSFT on a net basis of $ 111.13, with shares trading below $ 110. The fact is that the net base is lower than the one where I see the name as an addition.

(Microsoft, Salesforce, Amazon, and Alphabet are stakes in Jim Cramer's Action Alerts PLUS member club.) Do you want to be notified before Jim Cramer buys or sells MSFT, CRM, AMZN, or GOOGL? now.)