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January 16, 2022
According to the investment bank Bernstein, Microsoft will be one of the big winners in the metaverse.
The analyst Mark Moerdler points out that Microsoft already has several products that can be used in the metaverse. First, there is the Azure platform, Microsoft's cloud services that are needed to host metaverse environments. In addition, Microsoft has already developed hardware itself, such as the HoloLens. Microsoft also owns LinkedIn, which can handle the business side in the metaverse.
"Microsoft provides many products that will be needed for the metaverse. The development of the metaverse can thus be an important driver for future growth at various branches of Microsoft", said Moerdler.
In addition, Microsoft continues to benefit from its cloud offering Office 365, with popular programs such as Word and Excel in a subscription version continuing to earn money every year. The shift to the cloud will continue in the future and Microsoft will benefit from this with the Azure platform. Microsoft also generates revenue from LinkedIn, gaming, the sale of hardware such as the Surface, the search engine Bing and of course the Windows operating system, which has also been available in the cloud version of Windows 365 since last year.
So Microsoft realizes diversified revenue and does not depend on the success or failure of the metaverse, making it less of a gamble than the pure metaverse players.
Microsoft pays a quarterly dividend and will pay 62 cents in February. Throughout 2022, the company will pay out $2.48, resulting in a 0.8% dividend yield.
Bernstein's Mark Moerdler has set a price target of $364 for Microsoft, about 17% above Friday's closing price of $310.2. The other investment banks also give a buy advice. Jefferies and Wells Fargo give a price target of $400 and $425 respectively, while BMO Capital has a lower target of $360.