Microsoft (NASDAQ:MSFT) CEO Satya Nadella has set a high sales goal for the technology giant. Details of the company’s financial plans were unveiled in a court filing introduced in the federal court hearing over its pending Activision Blizzard (NASDAQ:ATVI) deal on Monday. Nadella forecasts MSFT to earn revenue of $500 billion by the Fiscal year 2030, representing an impressive 140% growth from its trailing twelve-month revenue base of $207.59 billion.
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Details of the CEO’s Ambitions
During a briefing to the board members and executives of the software firm on June 7, 2022, Nadella shared insights regarding the path to achieving their target, as outlined in the filing. Nadella called the vision “20/20,” where both sales and operating income are projected to grow by 20% annually, beginning FY22. However, MSFT could only achieve annual sales growth of 18% and operating income growth of 19% in the last fiscal year.
Nadella noted that the company will achieve the Fiscal 2030 target “by implementing an evolving strategy that is growth-oriented and consistent with our enduring mission and culture.” Not just that, but Nadella also aims to reward shareholders through a series of share buybacks and dividend payments. In total, shareholders must expect to earn over 10% in annual returns during the time frame stated in the filing. Currently, MSFT stock pays a regular quarterly dividend of $0.68 per share, carrying a yield of 0.79%.
Significantly, Microsoft faces stiff competition in its Microsoft Cloud offerings from the likes of Amazon Web Services (NASDAQ:AMZN) and Alphabet’s (NASDAQ:GOOGL) Google Cloud segment. The company’s CEO hopes to “close the gap” between Microsoft and rivals Amazon and Google through this 20/20 plan.
Is Microsoft a Safe Long-Term Investment?
MSFT stock has received a series of price target upgrades in the recent past, implying analysts are optimistic about the stock’s trajectory. The latest one comes from Wells Fargo analyst Michael Turrin, who lifted the price target on MSFT to $380 (15.6% upside potential) from $365 and reiterated a Buy rating.
On TipRanks, the stock commands a Strong Buy consensus rating based on 30 Buys, four Holds, and one Sell rating. Also, the average Microsoft price target of $347.94 implies 5.9% upside potential from current levels. Year-to-date, MSFT has gained 37.8%.
Moreover, investors looking for the most accurate analyst for MSFT could follow Brad Zelnick from Deutsche Bank. Copying his trades on this stock and holding each position for one year could result in 95% of your transactions generating a profit, with an average return of 31.59% per trade.
