Microsoft has approached Pinterest in recent months as the software giant was interested in acquiring the company, the Financial Times has learnt. Shares of the social media company were up by almost 8% in pre-market trading.
Negotiations are currently not ongoing, the FT report said. As of Feb. 10, Pinterest (PINS) had a market capitalization of $50.9 billion. The social media company has indicated in the past that it wants to remain an independent company, the report said.
Meanwhile, Microsoft (MSFT) has been pursuing a buying strategy to put together a portfolio of social media companies or “active online communities” that could run on its cloud computing platform, according to the FT.
Microsoft’s cloud platform Azure saw 50% growth during the most recent fiscal second quarter, as more enterprises shift to cloud computing.
Pinterest reported non-GAAP diluted EPS of $0.43 in its most recent fourth quarter, which came in ahead of analysts’ estimates of $0.32. Revenue during the quarter grew by 76% year-on-year to $706 million, beating consensus estimates of $645.6 million.
The company’s global monthly active users (MAUs) grew 37% year-on-year to 459 million and average revenue per user (ARPU) increased 29% year-on-year to $1.57 in 4Q. (See Pinterest stock analysis on TipRanks)
On Feb. 5, Credit Suisse analyst Stephen Ju raised Pinterest's price target from $74 to $81 but kept a Hold rating on the stock.
“Everything fell into place for Pinterest in 2020 as its inherent content discovery function rose in utility to the consumer suffering through various levels of shelter-in-place,” Ju wrote in a note to investors.
Based on management guidance for 1Q FY21, the analyst believes that Pinterest's momentum is likely to continue.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 15 analysts suggesting a Buy and 7 analysts recommending a Hold. The average analyst price target of $89.88 implies 11% upside potential to current levels.
News sentiment around Pinterest over the last seven days has been bullish, with 100% of the articles published being positive, compared to a 66% bullish sector average.
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Volkswagen's software arm Car.Software announced a collaboration with Microsoft to build a cloud-based automated driving platform (ADP) using the tech giant's Azure software. The partnership is aimed at helping the vehicle maker offer faster automated driving services.
Volkswagen and Microsoft (MSFT) have been strategic partners since 2018 in the development of the Volkswagen automative cloud.
Car.Software CEO Dirk Hilgenberg said, “By combining our connected driving solutions development expertise with Microsoft’s cloud software engineering knowledge, we accelerate the delivery of safe mobility services.”
Scott Guthrie, Executive VPof Cloud and AI at Microsoft commented, “Azure and its data and AI capabilities will help Volkswagen in delivering automated driving solutions faster and help their transformation into software driven mobility provider.”
The automated driving platform is expected to help Car.Software reduce development cycles to weeks from months and manage large volumes of data. (See Microsoft stock analysis on TipRanks).
Volkswagen plans to invest about 27 billion euros on digitalization and increase in-house developed car software from the current 10% to 60% by 2025. Furthermore, the first connected test fleets are expected to be put on the road in 2021.
This month, Piper Sandler analyst Brent Bracelin reiterated bullish call on Microsoft stock with a $300 price target (24% upside potential). Bracelin sees Microsoft as one of the best-positioned cloud titans for investors to own for the next decade. Additionally, he expects the company’s overall cloud software revenue to jump from $59 billion in 2020 to $306 billion by 2030.
The rest of the Street remains firmly bullish about the stock with a Strong Buy consensus rating based on 24 unanimous Buys. That’s with an average analyst price target of $280.18, implying 15% upside potential from current levels. That'a after the stock already gained 29% over the past year.
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