Microsoft Corporation (MSFT) To Post Revenue Above Estimates

Microsoft Corporation (NASDAQ:MSFT) impressive run in the recent weeks has to do with favorable ratings from research firms at the back of Surface Pro 3 registering impressive sales. CNBC’s, Melissa Lee, reports that the software maker is poised to post revenues above the initial estimates attributed to increased demand for Surface Pro 3.

Pacific crest has already raised its price target for Microsoft Corporation (NASDAQ:MSFT) to $58 a share with an Outperform rating as retailers across the U.S continue to report strong sales. The tablet is already seen as the laptop for business users as well as students.

CNBC’s Steve Grosso maintains that the software maker is benefiting from old tech becoming the new tech.

“My children schools are using the Surface Pro; they had that botched deal with the NFL, and now you are looking at kids, younger kids are looking at the Microsoft Corporation (NASDAQ:MSFT)’s Surface Pro. So if iPad sales have been weak maybe there is an opportunity here,” said Mr. Grosso.

Microsoft Corporation (NASDAQ:MSFT) continues to benefit a great deal from the declining sales of iPads as more people make the switch to Surface Pro 3. The stock’s valuation is also benefiting from the fact that investors had not factored in the impact of the Surface Pro sales with greater focus being given to other business segments.

There is belief in the industry that the strong demand for Surface Pro 3 could stream into the New Year as more enterprise clients continue to show interest on the device. The strong demand is poised to result in increased sales that should topple the company’s revenue estimates providing more gas for the stock to surge in the market.

“I think there is a lot of optionality to it. I don’t think people were expecting anything; it was about Xbox, it was about the server business, the enterprise business. Satya is eighteen times earnings, it fits that valuation multiple that people want,” said Mr. Timothy Seymour.

Microsoft Corporation (NASDAQ:MSFT) seems to have learned its lesson after unveiling a Surface Tablet two years ago that ran on two operating systems, which turned out to be a  total disappointment on sales. Surface Pro 3 currently runs on Windows 8.

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