Trading just off all-time highs, Microsoft (NASDAQ:MSFT) has a good chance of breaking out to new highs. If the company re-asserts its dominance in the hottest growing consumer space by buying TikTok, investors should continue accumulating its shares.
Back in the mid 2015s, Microsoft held Facebook stock. At that time, Facebook’s value kept going up. Yet Microsoft had no real play in social networking growth. Twitter (NYSE:TWTR), Snap (NYSE:SNAP), Facebook (NASDAQ:FB), Instagram, and Pinterest (NYSE:PINS) enjoyed spectacular growth.
Microsoft’s Office 365 on mobile and its back-end growth through Azure indirectly benefited from the growing usage. But the company needs a TikTok asset to directly grow with video sharing clips. Getting TikTok would give the software giant a strong play in winning back the mobile audience. Twitter and Snap would face sharply higher competition. Moreover, TikTok users would get a revamped product that is as secure as Microsoft’s Teams corporate messaging and video chat service.
Microsoft could use the TikTok platform to better understand what consumers want. It would re-energize its growth capabilities instead of relying only on subscription sales of its hot Office product. Investors would get to own Tiktok through their MSFT stock holding while the core business continues generating strong cash flow.
Continue holding Microsoft shares.
