Cloud computing services are expected to reach a market size of $1.5 billion by 2030, and Microsoft is projected to hold a 21% share in this market. In addition to this, Microsoft could generate $3 billion from ads for Netflix. These developments have led to improved stock options for Microsoft employees and investors. In this article, we will discuss MSFT Stock Options and review Microsoft’s stock performance for 2023.
Microsoft Boosts Salaries and Benefits
In May 2022, Bloomberg News obtained an email that stated that starting July 1, 2022, early to mid-career employees were going to receive almost double their salaries and stock compensation. The move was made to retain employees as other tech companies struggled with staffing. The foundation of Microsoft’s salary structure is the base, bonus, and stock for most of its 181,000 employees. The email also noted the impact of inflation and cost of living and served as a show of appreciation for the company’s employees.
The funds for the almost doubling of remunerations will come from the new partnerships and acquisitions that the team have worked hard to see come true. Later, we will mention a few of them and how they will positively impact the stock for investors too.
Stock Options for Employees
Microsoft’s move to boost salaries and benefits means that they are offering more stock options for their employees. Stock options are when employees are given the right to buy stock at a discounted fixed rate than the market rate, as a means to motivate employees to stay. In most cases, the stock is split over a period. For example, if an employee is eligible for 10,000 stock at a lower price, they can be vested as 2,500 for 4 years. This means that each year the employee is eligible for 2,500 and can claim all the 10,000 by the fourth year, so they have to stay in the company to benefit. There are situations like a merger or acquisition that might disturb the process, but allocations are made for such situations.
Low Turnover Means High Productivity
This is especially beneficial for employees and investors alike because low turnover means productivity, which also translates to better performance of the company on the stock market. After a decline to $213.43 in November 2022, Microsoft has continued to rise, climbing to $244.69 as of December 17, 2022, with a possibility of hitting $300 if the Feds do not hike the borrower rates again for the year. Experts predict that at worst, Microsoft would face resistance at $250, which is still a positive way to end a terrible year for growth stocks.
Azure’s Impact on Microsoft’s Stock
Further, some arms of the business are expected to bring extraordinary growth to Microsoft. For instance, Azure, Microsoft’s cloud computing service, with 21% market share after Amazon Web Services, saw a 50% growth in the first quarter of 2022. That growth has slowed down to about 40%, but analysts predict that the first quarter of 2023 could see a mid-50% growth. This upward trend is expected to have a positive impact on Microsoft’s stock.
In conclusion, Microsoft’s decision to boost salaries and benefits for its employees, in addition to offering more stock options, is expected to have a positive impact on the company’s stock performance. The growth of Azure, Microsoft’s cloud computing service, is also expected to contribute to the company’s success. Overall, experts predict that Microsoft’s stock is a good buy for investors.