Microsoft rises as Rubrik earnings awaited after the close

• Rubrik will report its second-quarter earnings after the close on September 9.
• This is only the second quarter that Rubrik has reported results as a public company.
• Piper Sandler has called RBRK a Top Idea and assigned it a $42 price target.
• Microsoft stands to benefit because of its financial stake in Rubrik and its corporate partnerships.

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

Microsoft shares gained 1.3% at the open, while Rubrik shares rose 2.4% ahead of its second earnings release as a public company. The Dow Jones is up 1.4% at the time of writing, well ahead of the S&P 500 and NASDAQ.

Microsoft and Rubrik stock news

Microsoft invested tens of millions of dollars in Rubrik in the summer of 2021 at a valuation of close to $4 billion. Rubrik deals with corporate data protection and counts big names like Goldman Sachs, Salesforce, and Pepsi as clients.

Rubrik’s main selling point is that companies have backups of all their customer data in the event of a ransomware attack. Hardware can be compromised, but corporations’ data is kept in secure backup storage.

Beyond Microsoft’s stake in the $5.5 billion deal, the two companies have multiple technology partnerships. Rubrik helps businesses using Microsoft 365 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 report an adjusted earnings per share (EPS) loss of -$0.49 and a GAAP loss of -$0.94. Revenue is expected to increase 5% from the previous quarter to $196 million.

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

Piper Sandler assigned a $42 price target to RBRK, representing a 30% premium to recent prices, and called it one of its best ideas. Analysts said a new generation of suppliers is driving Rubrik’s growth and they expect a re-acceleration of growth that should translate into 20% annual revenue growth going forward.

Microsoft Stock Forecast

Microsoft stock is trading below its 200-day simple moving average (SMA), a sign that further downside in the stock price is likely. The demand zone of $385 to $390 lies below and helped MSFT find strength in April and the early August dip. Below that is another support band from December 2023 in the low $360s.

The Moving Average Convergence/Divergence (MACD) indicator has just crossed into a bearish sequence, so bulls are likely to stay away until a period of consolidation is reached.

MSFT daily stock chart