Microsoft (NASDAQ: MSFT) finally crossed the $800 billion market cap level. Symbolically, the valuation (at a $105 share price) is well-deserved. The CEO is doing a great job growing software sales. Its re-think on hardware is another positive catalyst.
CEO Narayana Nadella continues to lead Microsoft towards ever-higher growth. Revenues are higher than ever and profit margins continue to impress investors. The company’s core strategy of delivering cloud software solutions among all platforms is paying off. No decent competitor to Office 365 exists, creating an incredibly strong moat for the product. Smartphone, desktop, and notebook users must pay a monthly subscription fee to gain access to the productivity software.
On the enterprise side, Microsoft’s SQL Server is holding up well against Oracle (NASDAQ: ORCL). Azure, Microsoft’s cloud computing answer to Amazon’s (NASDAQ: AMZN) AWS, continues to win big contracts from corporations.
No Smartphone
Microsoft’s growth impressive because it is done in the absence of having a mobile hardware solution. Yet its Surface tablet could gain market share as it takes on Apple’s (NASDAQ: AAPL) iPad. Surface Go, a lighter variant of the successful tablet could find success in the mainstream tablet space. Although Microsoft may make no profit from each unit sale, it benefits from promoting its Bing search engine and its Office 365 suite of software.
At a 52-week high, MSFT stock may continue moving up. Its earnings report on July 19 should re-affirm its continued growth story.
