Why Are Analysts Going Crazy for Microsoft Corporation (MSFT) Buy the Stock Now


Microsoft Corporation (NASDAQ: MSFT) is in the headlines after the company’s market cap crossed that of Apple’s on November 30, surprising the Wall Street. But experts were long predicting the rise of Microsoft to the throne of the most valuable company in the world. In March, when the world was betting on Amazon and Apple for the $1 trillion market cap competition, Morgan Stanley predicted that Microsoft was on the trajectory to become the $1 trillion company. The firm said that Microsoft’s strong position in the public-Cloud market, large distribution channels, increasing customer base and improving margins are making MSFT an extremely strong stock.

Morgan Stanley increased its one-year price target for Microsoft Corporation (NASDAQ: MSFT) stock to $130 from $110. This stock price effectively values Microsoft at $1 trillion.

Microsoft CEO Satya Nadella’s Cloud-First approach is behind the company’s dramatic success. Microsoft’s Azure Cloud platform is now second to only Amazon in terms of revenue and growth. In the June quarter, Microsoft Azure grew by 89% year over year.

Satya Nadella was quick to spot the gigantic opportunities hidden in the Cloud space. According to Synergy Research Group, the core Cloud business is a $60 billion-a-year market, which grew by 50% in the first quarter of 2018 alone.

All mainstream analyst firms are betting big on Microsoft Corporation (NASDAQ: MSFT), mainly because of its Cloud strengths, but also due to the company’s increasing ecosystem-based approach, which revolves around Office tools, PCs and laptops.

Microsoft Corporation (NASDAQ: MSFT) Azure cloud business grew 89% the third quarter, while the company’s “premium services” segment grew more than 100% for its 15th quarter in a row.

Earlier this year, J.P. Morgan increased its rating for MSFT stock to “Overweight” from “Neutral.” The firm said that the company will benefit from its “broad and powerful lineup” of Cloud solutions. The firm’s analyst Mark Murphy raised his December 2018 price target for the company to $110 from $94 for Microsoft shares.

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Author does not have investment in stock discussed in this article.

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