Why Microsoft Is Set to Soar While Apple and Amazon Face Challenges Amid U.S. Investigations
As antitrust investigations weigh down competitors, Microsoft's stock is positioned for sustained growth.
Microsoft (MSFT), currently the world's most valuable company with a market capitalization nearing $1 trillion, is on track for continued growth. This momentum comes as major tech giants like Apple (AAPL), Amazon (AMZN), Facebook (FB), and Alphabet (GOOG) experience declines due to ongoing antitrust investigations. Throughout this year, Microsoft shares have surged by almost 30%, signaling strong investor confidence.
Bernstein analyst Mark Moerdler, cited in a Barron's report, highlights Microsoft's strategic advantages in key market segments that could propel its revenue to levels comparable to Amazon Web Services (AWS) over time. Following significant gains in 2019, several analysts forecast that Microsoft's stock could appreciate by over 20% in the upcoming year.
Market Capitalization Comparison of Leading Tech Giants
- Microsoft: $1.02 trillion
- Amazon: $905.6 billion
- Apple: $893.8 billion
- Facebook: $497.3 billion
Source: Investopedia
Microsoft's Growth Fueled by Cloud Computing
One of the primary drivers behind Microsoft's robust stock performance is its expanding cloud-computing segment. Moerdler projects long-term cloud revenue exceeding $140 billion, building on fiscal 2018's $8 billion in cloud sales. With flagship products like Office 365 and its Azure platform, Microsoft has solidified its position in the booming cloud market. CEO Satya Nadella emphasized the company's commitment to accelerating innovation across cloud and edge technologies, empowering customers to enhance their digital capabilities and stay competitive. Barron's also noted a remarkable 73% year-over-year increase in Azure sales during the fiscal third quarter.
Implications of Microsoft's Performance Amid Industry Challenges
Microsoft's impressive cloud segment growth has bolstered its stock price, especially in contrast to the struggles faced by other tech leaders. While Apple, Alphabet, Facebook, and Amazon confront regulatory scrutiny and associated stock volatility, Microsoft benefits from a relatively clean slate since its own antitrust probe concluded in 2001. This regulatory distance allows Microsoft to focus on growth without the weight of negative public perception that currently burdens its competitors.
Outlook for Microsoft's Stock
Recently, Microsoft's share price surpassed $132, pushing its market value beyond the $1 trillion mark for the first time since April. As trading closed on Monday, MSFT maintained this valuation, firmly outpacing other major tech firms. Bloomberg reports that 36 analysts have set an average price target of $143 for Microsoft, indicating substantial upside potential. Piper Jaffray analyst Alex J. Zukin recommends a 'buy and hold' approach, citing the company's ongoing secular growth and strong fundamentals.
Have a news tip for Investopedia? Email us at tips@investopedia.com.
Discover the latest news and current events in Company News as of 30-06-2019. The article titled " Why Microsoft Is Set to Soar While Apple and Amazon Face Challenges Amid U.S. Investigations " provides you with the most relevant and reliable information in the Company News field. Each news piece is thoroughly analyzed to deliver valuable insights to our readers.
The information in " Why Microsoft Is Set to Soar While Apple and Amazon Face Challenges Amid U.S. Investigations " helps you make better-informed decisions within the Company News category. Our news articles are continuously updated and adhere to journalistic standards.