‘there isn’t a lot of opportunity here’

Shannon Saccocia has trimmed her exposure to Microsoft Corporation (NASDAQ: MSFT) ahead of its Q4 earnings, set to be disclosed after the bell.

Saccocia is concerned about the future guidance

The Chief Investment Officer at SVP Private says the “currency overhang” could weigh on the guidance for the balance of 2022. This afternoon on CNBC’s “Halftime Report”, she said:

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I’m concerned about the potential for guidance to be much lighter than expected for the back half of the year. We’ll see the currency overhang, there’s going to be some strain on hardware, [and] the enterprise spend could decline as well.

Nonetheless, Saccocia still has a sizable position in MSFT and remains convinced of the long-term story focused on digital and cloud.

Amidst the broader sell-off in “technology”, Microsoft stock is down 25% for the year.

Saccocia is not interested in expanding her stake in MSFT

Saccocia revealed to have been cutting her stake in Microsoft since early 2021 and is not interested in loading up even if shares slide “a little bit” post earnings. Explaining why, she noted:

From a multiple expansion perspective, there isn’t a lot of opportunity here. Microsoft has afforded its premium on execution and the depth and breadth of their offering. But with these headwinds of demand, that premium maybe is not warranted.

The American multinational is expected to earn $2.29 a share this quarter (up 11% YoY). Revenue from cloud services, including Azure, is seen growing substantially.

Ahead of the Q4 earnings, Wall Street has a consensus “buy” rating on MSFT with upside to $338 on average or 35% increase from here.