Microsoft trends higher as Rubrik earnings expected after close

Microsoft (MSFT), the third-largest holding in the Dow Jones Industrial Average (DJIA), is leading the index higher on Monday as one of its premier investments, Rubrik (RBRK), is set to unveil second-quarter earnings.

Microsoft stock gained 1.3% at the open, while Rubrik stock added 2.4% ahead of its second earnings release as a public company. The Dow Jones has thrust 1.4% higher at the time of writing, well ahead of the S&P 500 and NASDAQ.

Microsoft, Rubrik stock news

Microsoft invested tens of millions of dollars into Rubrik back in the summer of 2021 at a valuation near $4 billion. Rubrik deals with corporate data protection and has big names like Goldman Sachs, Salesforce and Pepsi as customers.

Rubrik’s primary selling point is that companies have backups of all their customers’ data in the case of a ransomware attack. Hardware may get compromised, but corporations’ data is kept in a secure backup storage.

Beyond Microsoft’s stake in the $5.5 billion firm, both companies have multiple tech partnerships. Rubrik helps companies using Microsoft 365 to secure their data in that software suite, while Microsoft will receive at least $220 million over 10 years for Rubrik’s use of its Azure cloud platform.

For the second quarter, Wall Street expects Rubrik to post an adjusted earnings per share (EPS) loss of $-0.49 and a GAAP loss of $-0.94. Revenue is expected to rise 5% from the previous quarter to $196 million.

Chase Coleman III’s Tiger Global hedge fund recently purchased 250,000 shares of Rubrik stock during the second quarter.

Piper Sandler slapped a $42 price target on RBRK, which is a 30% premium above recent prices, and called it one of its best ideas. Analysts said that a new breed of vendor is driving growth for Rubrik and that it expects a reacceleration in growth that should translate to 20% annual revenue growth going forward. 

Microsoft stock forecast

Microsoft stock is trading beneath its 200-day Simple Moving Average (SMA), a sign that further deterioration in the share price is likely. The $385 to $390 demand zone sits below and helped MSFT find fortitude in April and the early August rout. Below there is another band of support from December 2023 in the low $360s.

The Moving Average Convergence Divergence (MACD) has just crossed over into a bearish sequence, so bulls will likely stay away until a period of consolidation is met.

MSFT daily stock chart