No. of Recommendations: 3
38% increase in non-GAAP diluted EPS: Microsoft's non-GAAP diluted earnings per share (EPS) were $2.35, a 38% increase from $1.70 in the same quarter of the previous year.Its not clear what quarter you are referring to, the most recent quarter for MSFT was $2.99 EPS up from $2.35 a year ago. The last time MSFT earned $2.35 per share was that quarter and it was up $2.27 per share. The numbers you posted don't make a lot of sense and thus the entire valuation argument is a bit suspect (I also doubt using YoY PEG numbers would provide really any insight either).
https://www.cnbc.com/2023/10/24/microsoft-msft-q1-...But this is a digression, my point was sort of made with the response (which I actually appreciate - even if it is off track). I am thinking more LONG term and in AGGREGATE profits vs. sales. (ie: not next year, but say the next 5 - 10 years). It would seem you are very much focused on the short term.
For the S&P-500 in its entirety, the question remains.
Profits have risen faster than sales recently. Do you think this trend will continue? If so, what will be the primary driver? If not what are the implications for equity valuations?
I guess one answer that I might infer from your response is that profits will continue to concentrate in the largest companies; and that their already profit margins will expand? If you believe this, my question would be how long do you think this trend will continue?
tecmo
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