Microsoft (MSFT) provides software, cloud and other IT services around the world. I am bullish on the stock.
In the good old times, Bill gates and Microsoft were the emblems of the future of operating systems.
Windows is still a popular operating system, but today, Satya nadella is the CEO of Microsoft.
Additionally, Microsoft is slowly but steadily moving into a cloud computing business. This is a necessary step because computer software has evolved rapidly.
As we will see, MSFT stock reflects the continued growth and evolution of Microsoft. (See Best Analyst Stocks on TipRanks)
A glance at MSFT Stock
2021 has been a great year for Microsoft shareholders, to say the least.
The stock has been unstoppable, even despite the ongoing global shortage of microchips.
Maybe nothing can stop MSFT stock as it just printed a 52 week all-time high of $ 336.58.
It’s amazing when you consider that the action started in 2021 at $ 218.
It is a good thing that the MSFT stock has moved higher, as it is not really a dividend payer, with an annual return to term of only 0.7%.
Still, this is just the icing on the cake for loyal Microsoft shareholders.
Really, stock price appreciation is the key to generating returns on MSFT stocks. Given the current momentum and trajectory, $ 400 should be an easy target for the near future.
A time of transition
Microsoft is undergoing a number of changes. We’ve already alluded to Nadella becoming the face of the business, as well as Microsoft’s move to the cloud.
The economy at large, and the tech sector in particular, is also undergoing change.
On the one hand, the COVID-19 pandemic has accelerated cloud adoption. In addition, businesses and consumers have had to adjust to rising inflation and a shortage of microchips.
Nadella actually envisions Microsoft as a company that can help businesses navigate these changes.
“Digital technology is a deflationary force in an inflationary economy. Businesses – large and small – can improve the productivity and affordability of their products and services by increasing technology intensity, â€Nadella explained recently.
Of course, Nadella pointed out that her company is happy to help today’s businesses adapt to a cloud-centric tech landscape in the 2020s.
“The Microsoft cloud provides the end-to-end platforms and tools organizations need to navigate this time of transition and change,†Nadella said.
Cloud revenue
Of course, Nadella’s words wouldn’t mean much to investors if Microsoft wasn’t able to make money from its cloud segment.
There is no need to worry about this, as Microsoft Cloud generated $ 20.7 billion in revenue in the third quarter of 2021.
This figure represents a 36% increase year over year.
Really, the data shows that Microsoft’s transition to a cloud business has been very successful.
Intelligent Cloud revenue was $ 17 billion and increased 31% (up 29% in constant currencies), with the following highlights:
For example, Microsoft’s server products and cloud services revenue increased 35%.
This, in turn, was driven by the revenue growth of Azure and other cloud services by 50%.
Of course, there are other cloud companies out there, but not all of them publish numbers like these.
The Taking of Wall Street
According to the TipRanks analyst rating consensus, MSFT is a strong buy, based on 22 buy and hold. the Microsoft’s average price target is $ 369.36, which implies a potential upside of 10%.
Takeaway meals
As businesses around the world change, Microsoft is also undergoing change.
However, change is not necessarily a bad thing. Microsoft is moving in the right direction, and the financial data is proving it.
So, don’t worry about Microsoft’s move to the cloud.
This has only helped the MSFT share to climb, and the momentum should not stop anytime soon.
Disclosure: At the time of publication, David Moadel does not have a position in any of the titles mentioned in this article.
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