 What? Microsoft growth rate is dropping! Its EPS growth rate dropped from close to 50% from the previous quarter to the recent 20% in the latest quarter. No wonder the stock price is tumbling. Wait, is that true? Is Microsoft growth rate really dropping? If you want to find out, then keep on watching. Once again, I'm Ola Kaili. This is Chloe and welcome back to my channel. The all-in-one place for you to learn about stocks, investing, as well as options. If it's the first time of you coming to my channel, remember to hit that subscribe button as well as the notification bell so that you will not miss out any of my future investment insights. An early thumbs up is also appreciated because it will tell you to algorithm that you find this video helpful and it will actually help to push out to more people so that to inspire them to start investing safely. With the recent release of the Microsoft latest earnings, investors can see that its EPS SOSnet income growth rate dropped from 50% from the previous quarter all the way to 20% in the most recent quarter. Does this spell some signs of trouble? Well, let's go into the report and check it out. As you can see in the previous quarter back in 2021 September, with its revenue and operating income increasing more than 20% year on year, while its net income and EPS had a stunning growth of 50% year on year. However, in the latest earnings, although investors can still see that there's a 20% growth rate in its revenue as well as its operating income, but its net income and EPS has fallen by close to 50% to only 20% this quarter. So what is going on? Before usual conclusion that Microsoft is slowing and you want to sell away your stocks and your options positions, chill. Let's take a closer look of the income statement and see whether it is indeed that Microsoft is slowing down. As you can see from the previous quarter, the reason why its net income as well as its earning per share increased by 50% year on year is mainly due to its income tax payout was only $19 million as compared to a $2 billion income tax payout back in 2020. In the most recent quarter, Microsoft continued to pay out $2 billion in terms of its income tax and that is why it affected the EPS growth rate as well as its net income growth rate. However, if you look closely, all of its numbers are better than the previous quarter, showing that Microsoft is not only growing at a very decent double digit growth year on year, it's also growing quarter by quarter. All the different business segments are growing very healthily, especially with the club businesses Azura growing 46% year on year. The management is also forecasting higher growth in this area due to the proliferation of hybrid cloud environment. On top of that, Microsoft just recently announced that it's planning to acquire this very popular gaming company called Activation Blizzard and I'm very sure if you are a gamer, you are definitely familiar with names like Code of Duty, Worldcraft, Candy Crush. All these popular titles belong to Activation Blizzard and if Microsoft managed to successfully acquire them, all of them will belong to Microsoft. If the deal manages to pass through, Microsoft will become the world's third largest gaming company by revenue behind Tencent and Sony. In my opinion, it's definitely a super boost to Microsoft business revenue and they will also give Microsoft a better position to pivot itself into the future of Metaverse. Talking about Metaverse, Microsoft is also a pioneer in the AR and VR technology. With the company pouring more resources into its mesh and total lens project, Microsoft is definitely going to compete hard in the race to the future of Metaverse. With the strong earnings result, my target price for Microsoft is $345. And based on the current valuation, Microsoft is indeed undervalued and it has a lot more room for growth. In fact, I've been also using options to accelerate my return further and despite of the recent volatility, you can see that my position is still more than 20% up. If you also want to learn options and how you can actually use it to accelerate your return, then do join me in my upcoming options foundation class where I'll be sharing with you different option strategies for you to profit regardless of the market condition. All you need to do is to sign up via the link below. If you find this video helpful, remember to give it a thumbs up and share it to your friends so that you can also inspire them to start investing safely. Also remember to join my Telegram channel if you want to be up to date of my latest investment insights. With that, happy investing and happy Chinese New Year. I will see you in the next video. Bye bye, mother. Like you.