Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
The recent fall in Microsoft (MSFT) stock might be nothing to worry about when the company’s general health and future plans are considered.
By the close of the market last week, three of the world’s biggest tech stocks had gone down a bit. Alphabet Inc. (NASDAQ: GOOGL), Apple Inc. (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT) had all lost between 2% and 3% of their weight. Even though all stocks are known to swing considerably, these ones did not regain any of the losses and plunged even deeper till markets opened today. Coinspeaker takes a closer look at Microsoft (MSFT) stock.
Microsoft (MSFT) Stock Lost 3%
On Friday, Microsoft (MSFT) stock lost more than 3% and closed at $178.59. Before the markets officially opened, it had plunged further to $172.02 and is still hovering around that level currently. Regardless of the reduction, MSFT’s market cap still sits pretty at $1.36 trillion.
For 2020, MSFT has returned almost 10% already, with about 54% over the last 12 months. However, in less than a week, Microsoft stock has lost more than 7% and still seems to be shedding weight little by little. Notwithstanding, the general atmosphere towards Microsoft is one of optimism and general hope.
MSFT Stock Looks Good for 2020
In 2019 alone, Microsoft stock returned 55% for its investors. Its over $1 trillion valuation also puts it in a small group of strong tech companies including Apple, Amazon.com Inc. (NASDAQ: AMZN), and Alphabet. As good as it looks, there are reasons to believe that the company will perform better this year.
Firstly, Microsoft has been doing significantly better since 2014 when Satya Nadella was appointed CEO. Taking over from Steve Ballmer, Nadella put Microsoft on a course that has impressed the market for the last few years. Right now, everyone trusts that as long as Nadella is at the helm of affairs, next to nothing will go wrong.
There’s also Microsoft’s Azure cloud service to consider. Last year, the Pentagon awarded Azure with a defense infrastructure contract worth $10 billion. Even though Amazon is challenging the award, many believe it’s unlikely that Microsoft will lose it. The Amazon Web Services (AWS) is indeed much bigger than Azure. However, interference or not, the fact that Azure could receive the contract in the first place is a big deal for Microsoft.
There are also other considerations. Microsoft is looking to break new grounds with its gaming platform. The company will leverage on 5G networks to optimize its xCloud gaming platform. Also, the Barron’s report suggests that in the next few years, Microsoft plans to make a big statement with enterprise apps.
Even if some are not exactly bullish about Microsoft’s chances for 2020, almost no one is bearish.
A recent report says that Microsoft took 14.5% of the cloud market share in Q4 2018. By Q4 2019, it climbed to 17.6%. AWS, on the other hand, shrunk from 33.4% in Q4 2018 to 32.4% in Q4 2019. Now, Microsoft’s Zacks Consensus Estimate has increased by 5.2% in the last month.