Microsoft (MSFT), the world's largest company by market value at about $980 billion, is poised to keep rising as big tech rivals Apple (AAPL), Amazon (AMZN), Facebook (FB) and Alphabet (GOOG) have declined as a result of antitrust probes. So far this year, MSFT shares have climbed by nearly 30%. Bernstein analyst Mark Moerdler, quoted in a report by Barron's, offers that "Microsoft has distinct advantages in portions of the market that should give the company the ability to reach, over time, revenue that is not that dissimilar to that of Amazon AWS (Amazon Web Services)." With big gains already made in 2019, some analysts are predicting the stock could continue to climb by more than 20% in the year to come.
How Microsoft Dwarfs Its Big Tech Rivals (Market Value)
- Microsoft: $1.02T
- Amazon: $905.6B
- Apple: $893.8B
- Facebook: $497.3B
Microsoft Should Continue to Rise
Cloud-computing sales are a major driver of Microsoft's strong stock performance in recent months. Moerdler anticipates sales in this area of more than $140 billion over the long term, with fiscal 2018 cloud-computing sales of $8 billion. Between software subscriptions like the its popular Office 365 and Azure, Microsoft's cloud-computing business, the company has positioned itself exceptionally well at a time when interest in the cloud space is booming. Microsoft Chief Executive Satya Nadella indicated that the company is "accelerating [its] innovation across the cloud and edge so our customers can build the digital capability increasingly required to compete and grow." Another column by Barron's points out that the Azure segment saw fiscal third-quarter sales climb by 73% year-over-year.
What It Means
The impressive performance of Microsoft's cloud segment has pushed the company's stock upwards, but it's the timing of these gains as compared with losses across many other tech leaders that makes MSFT stand out. A spate of antitrust reviews has plagued many of Microsoft's rivals in the tech sector. Apple, Alphabet, Facebook and Amazon are in hot water which has threatened their respective stock prices in recent weeks, though each has recovered somewhat in the last few sessions.
Microsoft was the target of its own major antitrust probe which ended in 2001, but the company has long moved on from any negative public perception surrounding those events. As a result, while some of its biggest competitors are mired in regulatory challenges and negative publicity, Microsoft has been free to grow on the strength of its strong performance figures.
Last Friday, Microsoft's shares climbed above $132, bringing the company's market capitalization to over $1 trillion for the first time since it briefly achieved the landmark in April. As of the end of trading on Monday, MSFT remains above the $1 trillion threshold, ensuring that it dwarfs the other Big Techs. According to a report by Bloomberg, 36 analysts have predicted an average price target of $143 for MSFT stock, suggesting there is still plenty of room for upside. Piper Jaffray analyst Alex J. Zukin suggested that "we continue to very much have a 'buy it and forget it' mentality on the stock right now as the company appears to be in the midst of secular fundamental growth."