By Silvano Grimaldi, CEO of the independent asset management firm Grimaldi & Partners AG.
Monthly Review
International equity markets ended April 2025 with losses.
Negative Factors
Trade conflicts and new US tariffs: The announcement and implementation of new import tariffs by the US administration, particularly against China, Mexico and Canada, created uncertainty and placed pressure on globally active companies.
Economic slowdown: US GDP contracted at the beginning of the year, while several indicators pointed to weakening economic momentum. This reduced expectations for future growth.
Persistently high inflation: Inflation remained above the central bank’s target, delaying potential interest-rate cuts and keeping financing costs elevated.
Weak consumer sentiment: Consumer confidence fell to a multi-year low, negatively affecting equity markets.
Political uncertainty: Political signals and threats from the new US administration under Donald Trump created additional volatility and encouraged investors to adopt a more cautious approach.
Stock in Focus
Microsoft’s Q3 Results Exceed Expectations
Strong Quarterly Results
Microsoft reported solid revenue and earnings growth above market expectations. These results strengthened investor confidence in the company’s long-term growth potential.
Growth in the Cloud Business
Microsoft’s Azure cloud division continued to record strong growth and remained one of the company’s most important growth drivers.
Strategic Partnerships and Acquisitions
New partnerships and acquisitions that expand Microsoft’s product portfolio and strengthen its market position could positively support the share price.
Positive Analyst Assessments
Several analysts raised their price targets or confirmed positive recommendations for Microsoft shares, providing additional support to investor sentiment.
Innovation and New Products
New products and technological developments, particularly in artificial intelligence and software solutions, increased the attractiveness of Microsoft shares.
Outlook – May 2025
Opportunities
Strong growth in artificial intelligence and cloud computing: Companies such as Nvidia and Microsoft continue to benefit from high demand for AI hardware and cloud services, which could support equity markets.
Improving corporate earnings and quarterly results: Solid company results that exceed expectations could strengthen investor confidence and support further market gains.
Stabilising inflation and interest-rate policy: If inflation continues to ease and central banks maintain a cautious monetary-policy approach, financial conditions could improve and encourage investment.
Risks
Continued geopolitical tensions and trade conflicts: New tariffs or political uncertainty, particularly between the United States and China, could place additional pressure on the global economy and equity markets.
Economic slowdown: Signs of weaker economic growth, including declining GDP or falling consumer confidence, could reduce market expectations.
Volatility caused by political decisions and regulations: Unexpected political measures or regulatory intervention, particularly in the technology sector, could lead to increased market volatility.
Performance Expectations
For May 2025, we expect a positive trend in international equity markets.
Stock Recommendation: Microsoft
This publication is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Past performance is not indicative of future results.
