Microsoft Stock: These 4 Factors Make it a Strong Buy

Posted On November 8, 2017 3:47 pm

Microsoft Corporation (NASDAQ:MSFT) is in the spotlight after the company crushed analyst estimates for the fiscal first quarter of 2018. Microsoft’s revenue in this period was $1 billion more than Wall Street forecasts.  Microsoft has several growth catalysts that allow Microsoft stock to constantly impress the Street.

Recently, Argus Research analyst Joseph Bonner said in a report that Microsoft is swiftly catching up with Amazon in the Cloud competition. Bonner thinks that Satya Nadella has made Microsoft’s commercial Cloud business a strong segment over the last several months. Microsoft currently has a 7% market share in the commercial Cloud industry. But this market share is expected to soar rapidly. The analyst increased his rating for the stock to “Buy” from “Hold”. He has a price target of $95 for MSFT.


Microsoft’s Office apps are gaining intense popularity around the world. In the last quarter, Office commercial revenue jumped 10%, thanks to 42% increase in Office 365 commercial revenue.  The Enterprise world is ready to pay a lot of money to buy Microsoft office mobile apps for their clients and employees. In the second quarter of 2017, Microsoft Azure grew by 90%, compared to AWS, which grew by just 47%.  Microsoft’s Dynamics 365 has finally started to grow as well. Dynamics grew by 69% in the fiscal first quarter.

Microsoft also provided an update on the results and performance of LinkedIn, which the company bought for a whopping $26 billion last year. The price was too much for several skeptics at that time. But Microsoft is finally proving that it made the right decision. Microsoft CEO Satya Nadella announced that LinkedIn is well on track to get over a billion sessions this calendar year. In the first quarter, job visitors grew by 65% year over year, while feed views increased by 60%. LinkedIn is poised for an explosive growth as more and more people are turning to the internet for job hunt.

Microsoft’s legacy and non-Cloud businesses, which had scarce chances for growth, have also started to show signs of life. Windows OEM increased by 4% in the quarter, thanks to the revival in the PC market. Search ads and Microsoft Surface revenues posted a double digit growth, while the gaming segment grew by 1%. Taken together, these 4 factors make Microsoft stock a strong buy heading into 2018.

Related: 3 Factors Led This Company to Double Its Stock Price!

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