GoPro Inc (GPRO) Shares Jump After Microsoft Corporation (MSFT) Licensing Deal

GoPro (NASDAQ:GPRO) Hero 4

GoPro Inc (NASDAQ:GPRO) saw its stock jump late Friday after it was reported it struck a licensing deal with Microsoft Corporation (NASDAQ:MSFT). Terms of the deal were undisclosed, but the deal sees the firms work together on file storage and other system tech.

GoPro (NASDAQ:GPRO) Hero 4

GoPro Working With Microsoft – is a Turnaround Imminent?

Not a lot of details have been given about the deal. But a blog post on the Microsoft website suggests that the patent agreement is another sign of how important intellectual property, or IP, is playing in the tech sector.

It’s now just guessing as to what the patents will target as the two tech firms work together.

Nick Psyhogeos, president of Microsoft Technology Licensing, says the latest agreement “shows the incredible breadth of technology sharing enabled through patent transactions.” He added that Microsoft’s licensing of personal wearables is seeing surging demand as it works with firms in other sectors to give users an array of solutions.

The Tech Times reports that one of the licenses available in Microsoft’s Licensing files is the exFAT file system. The exFAT system has the power to store huge media files that range from 32 GB to 256 TB. It’s believed it will be a major part of the Microsoft-GoPro agreement.

Neither company has expanded on the initial reports.

With that being said, GoPro investors are likely pleased. This is just another big story from the action camera maker in recent weeks.

Last month, GoPro said it was giving its users the ability to livestream their footage on Periscope, the livestreaming app from Twitter Inc (NYSE:TWTR). This would allow GoPro HERO4 camera users to broadcast their journeys directly to Periscope.

It was also reported last month that it renewed a deal with National Hockey League (NHL) and the National Hockey League Players’ Association (NHLPA). The new deal would see GoPro film and produce an 11-part series called “NHL After Dark.”

GoPro, Microsoft Financial Positions

After reports flooded in regarding a new deal with Microsoft, GoPro’s stock jumped as high as four percent. However, that’s only a tiny glimpse into its performance over the last year.

The firm’s shares have fallen more than a third year-to-date, and 10 percent in extended trading throughout January. Forecasts suggest that GoPro’s current-quarter revenues will come in under analysts’ estimates. Reasons include declining demand, rising competition and investors fearing it’s a “one-trick-pony.”

GoPro has seen its share of the helmet- and body-mounted cameras fall due to other companies are offering cheaper products and smartphone cameras that just as advanced.

On Monday, GoPro shares were trading in positive territory at around $11.20 a share.

How is Microsoft doing? The tech titan, much like other stocks this year, has seen its shares tumble around 11 percent. With that being said, the stock has climbed more than 75 percent over the last five years.

Many investors have been long Microsoft because of the wave of recent moves. It recently bought the keyboard app SwiftKey. The demand for its cloud services (Azure) has soared. And everyone is waiting for HoloLens, hardware that enables users to see and hear HD “holograms.”

Cloud computing is big business.

The firm’s annual cloud revenue is likely to hit $20 billion by the end of 2018. Experts say Microsoft will move Windows and Office into cloud-based services. This could prove to be a huge move since both programs have millions of users.

Azure’s revenues increased 140 percent annually last quarter. Its annual run rate is estimated to be $1.6 billion, the second biggest IaaS/Paas system behind Amazon.com Inc.’s (NASDAQ:AMZN) AWS.

With Office and Windows already in the cloud realm, full conversion makes sense for its brand. CEO Satya Nadella told investors that Azure users who buy Office 365 consume eight times more Azure than others.

It seems the only concern investors have is Microsoft’s lack of transparency about the cloud.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.


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