Who says you can’t teach an old dog new tricks? In spite of being a tech company that’s older than many of its employees,
Microsoft Corporation (NASDAQ: >MSFT
>MSFT) continues to impress. Under the leadership of CEO Satya Nadella, the company has focused on what works — software, subscription services, and especially, the cloud. Thanks to management’s concerted efforts, MSFT stock is running a healthy 18%-plus year-to-date.
If anybody is expecting any negative surprises, particularly with Microsoft earnings looming, I’d probably sit and reconsider. For the month so far, MSFT stock is up about 7%. That compares favorably to longtime rival
Apple Inc. (NASDAQ: >AAPL
>AAPL), which has gained a little more than 4%. Even mighty
Amazon.com, Inc. (NASDAQ: >AMZN
>AMZN), which competes in the lucrative cloud, can only muster about 6%.
It’s a remarkable turnaround for Microsoft stock. Just a few years ago, MSFT stock didn’t appear capable of fighting its way out of a paper bag. Similar to
Sony Corp (ADR) (NYSE: >SNE
>SNE), Microsoft’s retail stores appeared like a cheap copy of the Apple store concept.
Now, there’s a legitimate reason to pay them a visit.
Still, there’s something to be said about moving too high, too fast. Johnson Research Group warned that MSFT stock entered overbought territory ahead of its earnings report. Traders may be “buying the news,” which might signal a nearer-term pullback after the quarterly financial disclosure.
Are the markets too enthusiastic about Microsoft stock, or is there truly more room to grow?
MSFT Stock Is Winning in the Cloud
Click to Enlarge I’ve been bullish on MSFT stock in the past, and I’m not about to stop now, technical indicators be damned! While I foresee the very real possibility of a pullback, I’m thinking the magnitude will be roughly around 5%. This is where the 50-day moving average currently stands, and represents a logical “resting” area before a bullish continuation.
Unfortunately for the bears, Microsoft stock has too much going in its favor. InvestorPlace contributor Richard Saintvilus points out that the company recently announced layoffs to its sales force positions.
Though the cuts only impact a small percentage of Microsoft’s total headcount, it facilitates streamlining for the cloud. As Saintvilus puts it, MSFT “doesn’t want to play second fiddle to Amazon indefinitely.”
Source : https://investorplace.com/2017/07/microsoft-corporation-msft-stock-hot/