Microsoft with a 14 percent chance
In the first six months of 2023, Microsoft shares rose by 50% from USD 215 to as much as USD 360. Following this steep rise, the software company's shares traded within a range of USD 315 to USD 335. In response to the publication of quarterly figures that exceeded experts' expectations, the share price jumped to its current level of USD 349.
The strong double-digit percentage sales growth in the cloud business, which was achieved even without the Artificial Intelligence division, leads experts to expect the share price to continue to develop positively, with buy recommendations with price targets of up to USD 400 (UBS and Jefferies &Company).
The investment idea
Anyone considering an investment in Microsoft shares, which are exclusively recommended as a buy, may be interested in purchasing a bonus certificate with a cap as an alternative to buying shares directly. With such products, investors can achieve annual gross yields in the double-digit percentage range with a high safety cushion.
Apart from dividend payments, the direct purchase of Microsoft shares will only generate positive returns if the share price rises. With bonus certificates with and without a cap, investors can generate extremely attractive annual returns not only if the share price rises, but also if it stagnates or falls.
How it works
If the Microsoft share never touches or falls below the barrier at USD 253.50 by the valuation date of the currency-hedged certificate (USD 1 equals EUR 1), the bonus certificate with cap will be redeemed on December 30, 2024 with the maximum redemption amount of EUR 388.70.
The key data
The HSBC bonus certificate with cap (ISIN: DE000HS2Q350) on the Microsoft share has a bonus level and cap at USD 388.70, which corresponds to EUR 388.70 due to currency hedging. The cap defines the maximum payout amount of the certificate. The barrier activated until the valuation date, December 20, 2024, is USD 253.50. At the Microsoft price of USD 349, investors could buy the certificate at EUR 341.97.
The opportunities
As the certificate is currently available at EUR 341.97, it enables a gross yield of 13.66% (equal to 12% per year) in 13.5 months if the share price never falls by 27.36% to USD 253.50 or below by the valuation date.
The risks
If the price of the Microsoft share touches the barrier at USD 253.50 by the valuation date and the share is quoted below the cap on the valuation date, the certificate will be redeemed at the closing price of the Microsoft share determined on December 20, 2024.
This article does not constitute a recommendation to buy or sell Microsoft shares or investment products on Microsoft shares. No liability is assumed for the accuracy of the data.
- An experienced financial advisor might suggest that ambitious consumers interested in investment opportunities should consider buying a Microsoft bonus certificate, as it offers high annual returns, even if the stock price stagnates or decreases.
- If Microsoft's share price continues to perform well, as expected by experts who recommended buying the stock with price targets up to USD 400, investors holding a Microsoft bonus certificate with a cap could generate significant profits, following the suggested buy recommendations.
- In contrast to directly purchasing Microsoft shares, investors who opt for a bonus certificate can benefit from potential returns, even in a scenario where the software giant's stock experiences moderate financial investment fluctuations or decreases in stock tips value.
Source: www.ntv.de
