Microsoft stock is up 28% from a year earlier thanks to strong revenue gains.
Shares of Microsoft have been on a roll this year. The stock is up 37% year to date and has consistently outperformed the S&P 500. And most Wall Street analysts believe Microsoft shares still have a lot more room to grow…
The stock is considered a strong buy, based on 23 analyst ratings over the last three months. The average price target is $153.77, representing an upside of over 11%. And Microsoft is currently the only company with a market capitalization of over $1 trillion.
Things are going so well for Microsoft that CEO Satya Nadella has been selling millions of dollars of the company’s shares. Nadella has sold a total of 382,637 shares this year, primarily through planned exchanges. Nadella himself owns 1.11 million Microsoft shares.
All that’s to say, if you’re looking for a long-term growth stock to invest in, Microsoft could be a worthy contender. Here are a couple of reasons why fiscal 2020 should be a great year for the company.
The Company Is Solidifying Its Gaming Business
Microsoft has been involved in the gaming business for a long time … But most recently, it’s been accelerating the move to cloud gaming. And in May, the company announced it would partner with its rival Sony to develop new cloud gaming solutions.
Microsoft has plans to launch a video game streaming service, which promises to change how gamers play for years to come. And, of course, the company is working on releasing its Project Scarlett console. This will include 8K graphics, SSD storage, and ray tracing support. Project Scarlett is set to be released sometime between October and December 2020.
Microsoft’s Cloud Computing Business Is on Fire
One big factor that excites investors about Microsoft is the company’s booming cloud business. The company has been investing heavily in this segment of its business ever since Nadella stepped in as CEO in 2014. The company’s Azure products are attractive to businesses and consumers alike.
Amazon is still the leader in the cloud computing space, but Microsoft is working hard to quickly catch up. It’s currently the second-largest cloud provider, and it’s growing at a faster pace than any of its rivals. It’s not a huge stretch, then, that at some point Microsoft could dethrone Amazon as the ruler of cloud computing.
Gartner predicts that by 2022, cloud computing stands to be a $331.2 billion industry. That means Microsoft still has plenty of room to grow in this segment.
The Future Looks Bright for Microsoft
Just five years ago, shares of Microsoft were trading around $46 per share. Now, some analysts believe the company’s shares could eventually surpass $160. The company continues to exceed revenue expectations and find new ways to claim market share.
Microsoft has tons of opportunities with consumers and businesses alike. And investors looking for safe havens during the ongoing U.S.-China Trade war may look to Microsoft stock. The tech giant seems well prepared to march on regardless of what happens on the tariff front.
