Good News for Microsoft Investors; Robinhood Hits a Bump

Good News for Microsoft Investors; Robinhood Hits a Bump

Microsoft ( NASDAQ:MSFT ) stock hits an all-time high. Robinhood ‘s ( NASDAQ:HOOD ) third-quarter revenue is much lower than expected and shares fall close to their IPO price. Motley Fool analyst Bill Mann analyzes these stories, discusses Twitter ‘s ( NYSE:TWTR ) ongoing struggles as a business, and shares why Almond Joy needs to be rebranded.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center . To get started investing, check out our quick-start guide to investing in stocks . A full transcript follows the video. Should you invest $1,000 in Microsoft Corporation right now?

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This video was recorded on Oct. 27, 2021.

Chris Hill: It’s Wednesday, October 27th. Welcome to Market Foolery. I’m Chris Hill. With me today, Bill Mann. Good to see you.

Bill Mann: Hey Chris, how are you?

Chris Hill: I’m doing well. We’ve got the latest from Twitter, we’ve got the latest from Robinhood. We’re going to start though with Big Tech getting bigger. Microsoft’s first quarter profits were higher than expected. Revenue grew 22 percent, which is the fastest growth since 2018. Shares of Microsoft up five percent and hitting a new all-time high. Five percent is a lot.

Bill Mann: Five percent is a lot for any company, but we were doing the math, that’s $100 billion. It’s $100 billion just conjured out of thin air. Microsoft, it’s crazy how good this company is operating right now. That is not just massive gains this quarter, that’s 17 straight quarters of double digit revenue growth, and it’s been accelerating. It’s been getting faster. They are growing at a rate that the tiniest of start-ups would kill for. It is a $45 billion revenue per quarter company right now and growing really quickly. Beat every estimate, Azure is going great, LinkedIn is going great. This company is just firing.

Chris Hill: I know we talked about this on the show recently. There was the news about LinkedIn being shut down in China, or I should say Microsoft saying, “We’re shutting down our LinkedIn operations. We don’t need to rehash all of the reasons why.” But to me, the headline was less that they were doing that and more that it’s something that [inaudible 00:01:58] came out and said, “Yeah, LinkedIn is contributing more than $10 billion in revenue every year,” which I know it was a surprise to me. I think that’s a surprise to others as well.

Bill Mann: Yeah. When Microsoft bought LinkedIn, it was one of those transactions where I think most of us said, “I’m not sure that I really see how this fits into their suite,” but once again, I don’t think we were right about being skeptical about it. The results would suggest that they knew what they were talking about when they brought LinkedIn into the fold.

Chris Hill: Agree 100 percent. I think the most generous of expectations at the time was, well, you’ve got all the money in the world and you can buy that thing if you want to.

Bill Mann: [laughs] That’s right.

Chris Hill: If it works out, it will take years. My memory of the time is like, “Yeah, I suppose that can work out.” It’s going to take years. I don’t think anyone expected it to be contributing in this way on a relatively soon basis.

Bill Mann: In fact, Chris, there was a theory that was baded about, perhaps by me but by others as well, that LinkedIn was being acquired, that Microsoft was taking it out so that they didn’t have to compete with it in some way. One of those things that you hear, well, we’re the deep pockets, this is something that is perhaps a threat to us, let’s just buy it, but that’s not what’s happened. That’s absolutely not what’s happened, and the incredible thing is that this entire time, Microsoft is paying a substantial dividend, buying back tons of shares. It’s almost like they can’t get […]

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