When we consider a technology company’s campus, we generally do not think of libraries. But tech giant Microsoft (MSFT) actually has them, or had, anyway. Microsoft recently revealed it closed its campus library in favor of “digital learning experiences.” The move gave Microsoft a little extra credibility with investors, and sent shares up modestly in Friday afternoon’s trading.
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The Microsoft Library—a traditional, paper-book library in the heart of Microsoft’s campus—is actually poised to shut down as part of a push to the aforementioned digital learning experiences. And, in a move that will surprise very few, Microsoft will be supporting the initiative to shut down the paper library with artificial intelligence (AI) backing.
Microsoft will actually shut down several libraries. The library in Redmond is out, of course, but so too are the libraries in Beijing, Dublin, and Hyderabad. The spaces the libraries occupied are being converted to “…collaborative spaces for group learning and experimentation.” The changes will take a few weeks to fully take hold, reports note, but have already begun. Microsoft is also paring back employee subscriptions for industry reports and newspapers as well, including both Strategic News Service and The Information.
Xbox Sales Rates
Meanwhile, there are some growing concerns about sales rates for the Xbox Series X and Series S console systems. Granted, these are six-year-old pieces of hardware at this point, which means most everyone who wanted one already has one. But growth rates are flat, reports note, and with the next console generation still a ways away, the notion that Microsoft may have lost the console wars is strong.
In the first 18 months after launch, sales were brisk. It was quite difficult to find an Xbox Series X or Series S for a while there, especially as COVID-19 did a number on supply chains everywhere. But after that first 18 months—which featured around 12 million consoles bought from over 40 countries—growth rates dropped. And with competitors creating, and then widening, a sales gap, it does not bode well. Still, the next Xbox is set to be so wildly different from previous versions that comparisons will be downright difficult to effectively make.
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 32 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 6.44% rally in its share price over the past year, the average MSFT price target of $631.36 per share implies 36.53% upside potential.
