Since the start of 2024, Microsoft has maintained its growth from the previous year, becoming the second company to reach a $3 trillion market cap after Apple. The market will put Microsoft to the test when it releases its new earnings report after hours on January 30th, which may impact whether its market value remains above the $3 trillion mark.

As we now turn our attention to Microsoft's earnings report, it is important to identify the indicators that could potentially drive its stock price. By looking at the company's growth trajectory, we can pinpoint some key indicators.

There are two main indicators that companies look towards to drive growth: an increase in revenue and higher profit margins. At a glance, it seems Microsoft has been successful in achieving both.

From FY2018 to FY2023, the company has successfully transformed itself from a personal computing manufacturer into a leading cloud computing provider. In its Productivity and Business Processes segment, which includes popular services like Office 365, Microsoft has shifted to a subscription-based model, rather than selling traditional software licenses.

By embracing this new approach, Microsoft has experienced tremendous growth in both revenue and net margin. Between FY2018 and FY2022, its revenue and net margin have almost doubled.