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Earnings Watch: Earnings Watch: Why Microsoft is suddenly the most valuable company in Big Tech

Here is a blind earnings test:

Company A: $110 billion in annual revenue, expected to grow to $125 billion in the next year; $30 billion in annual profit, expected to grow to $35 billion.

Company B: $110 billion in annual revenue, expected to grow to $130 billion; $30 billion in annual profit, expected to grow to about $32 billion.

Seems pretty similar, right? One company is growing sales faster, the other is growing profit faster, but the valuations don’t seem like they should be too disparate.

Well, they are, differing by about a quarter-trillion dollars. Company A is Microsoft Corp. MSFT, -0.59% , currently the only U.S.

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