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Microsoft Stock Still a Buy After MSFT Q4 Earnings Loss

Microsoft stock

Microsoft stock is suffering from a bad reaction to a Q4 earnings report that, at first blush, looks really awful.

MSFT stock plunged more than 4.5% in after-hours trading Tuesday, thanks to a one-time write-off of the purchase of Nokia's devices unit.

But the reality isn't nearly so bad. Backing out the Nokia charge, Microsoft's EPS was $0.62 - higher than analyst expectations for $0.58.

Here's why Microsoft stock is still a buy...

Should I Buy Microsoft Stock?

buy Microsoft stock

Whether to buy Microsoft stock is a question investors started to ponder last year as the iconic tech company shed its decade-long status as a perennial laggard.

As Microsoft Corp. (Nasdaq: MSFT) stock soared nearly 40% from November 2013 to November 2014, investors were eager to jump on board.

But since then, investors have had reason to wonder if it's still a good idea to buy MSFT stock.

This question actually has a pretty easy answer...

Microsoft (MSFT) Stock Is Not a Sell – Goldman and Citi Are Wrong

MSFT stock

Now that two of Wall Street's biggest names have put an unusual "sell" rating on Microsoft Corp. (Nasdaq: MSFT) stock, investors might be tempted to dump shares of the tech giant.

That would be a mistake.

Both Goldman Sachs and Citigroup have utterly misunderstood what's going on with Microsoft. Both have lowball price targets on Microsoft stock. Both ignored a string earnings beat last month.

They just don't get it.

Microsoft Stock Soars on Earnings Beat, Strong Cloud Growth (MSFT)

Microsoft stock

Microsoft stock gained as much as 10% today (Friday) as the company's latest earnings report showed that its "mobile-first, cloud-first" strategy is gaining momentum.

Microsoft Corp. (Nasdaq: MSFT) reported its fiscal Q3 earnings yesterday (Thursday) after the market close.

Even with a decline in Windows sales, one of the company's traditional cash cows, Microsoft handily beat Wall Street expectations.

And the areas that outperformed in Q3 clearly are Microsoft's future...

MSFT Stock Price Likely to Get a Push from Earnings

MSFT stock price

Microsoft Corp.'s (Nasdaq: MSFT) Q3 earnings don't figure to offer many surprises, but even a small beat will drive up the MSFT stock price.

Microsoft reports earnings tomorrow (Thursday) after the market close.

Microsoft, like longtime partner Intel Corp. (Nasdaq: INTC) and most PC makers, has suffered as PC sales have leveled off in recent years. Investors mainly want to know that Microsoft has a viable plan for future growth.

Here's why any sign of progress will have a big impact on the Microsoft stock price...

Low Microsoft Stock Price Today Provides Terrific Buying Opportunity

Microsoft stock price

The Microsoft stock price has taken a hit this year, down 11.8% on the year.

But don't be fooled by the current troubles of Microsoft Corp. (Nasdaq: MSFT) stock. It has fallen so much that at this point, it may well be oversold at around $40.65 today (Wednesday).

Here's where the Microsoft stock price is headed...

Microsoft Stock Forecast 2015: Watershed Year Will Keep Price Climbing

Microsoft stock forecast

The Microsoft stock forecast for 2015 is for another strong year as Microsoft Corp. (Nasdaq: MSFT) continues to adjust to a tech landscape radically different from the one it dominated in the 1990s. 

Microsoft stock picked up momentum after new CEO Satya Nadella officially took over Feb. 4. Nadella's willingness to break with that past and focus on areas with the most potential to grow earnings, particularly the cloud, has re-energized the company.

Here's what Microsoft has at stake in 2015...

Two Numbers Microsoft (Nasdaq: MSFT) Doesn't Want Investors to See

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Microsoft's (Nasdaq: MSFT) new CEO Satya Nadella could bring the company what it's been missing, as we recently pointed out, but Nadella will have to tackle two very troubling numbers just reported for Microsoft.

These are figures that give us a glimpse of what could prevent MSFT stock from climbing in 2014 following its 40.9% rise last year.

These numbers were just released last week - and they're ugly.

Here's the story...

Microsoft (Nasdaq: MSFT) Stock Could Get a Lift From New CEO Nadella


After showing some signs of life last year, Microsoft Corp. stock could get another boost in 2014 when a new CEO takes the helm - and the job could be going to a company insider. And while Satya Nadella may not be perfect, he has several strengths that could be

just the tonic for Microsoft's stock...

Why the Microsoft Reorganization Plan Won't Fix What's Wrong

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With a Microsoft reorganization plan expected to be announced on Thursday, investors at this point must be wondering: will it matter?

Shareholders of Microsoft Corp. (Nasdaq: MSFT) have only recently gotten a glimmer of hope. Microsoft stock had languished in the $25-$30 range for more than a decade until this year, which has seen MSFT pop about 30%.

Although extremely profitable, Microsoft under the leadership of CEO Steve Ballmer has struggled to move beyond its core products of Windows and Office, which still deliver nearly all of those profits.

What this new Microsoft reorganization plan needs to do is reorient the Redmond, WA-based company toward future engines of growth, such as the mobile wave of smartphones and tablets, cloud computing and big data.

Insiders say Ballmer intends the new structure to provide "functional coherence" and will align the company into divisions based on services and devices.

But given Ballmer's spotty track record and Microsoft's unwieldy size (98,000 employees), it's not a given that any major structural overhaul will do much good in addressing the company's real problems.

As one worried Microsoft insider told The Wall Street Journal's All Things D: "If this is all about an org chart and not how to build great products, it does not matter what org chart Ballmer presents. Consumers buy products, not management structure."

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Why Sinofsky Left Microsoft (Nasdaq: MSFT)

It hasn't even been three weeks since the hugely hyped release of Windows 8, and Windows division president Steven Sinofsky has left Microsoft Corp. (Nasdaq: MSFT).

The abrupt departure has many questioning the success of Windows 8, Sinofsky's relationship with Microsoft CEO Steve Ballmer, and the evolution of the software giant.

"It is a little surprising to see a departure of someone at this level in charge of so many products with such immediacy, with no transition period. Microsoft is going to enter another period of management transition," Michael Gartenberg, an analyst at Gartner Inc. told Bloomberg News.

During his tenure at Microsoft, Sinofsky won accolades for leading intricate software projects and making sure they were delivered on time.

It had been widely speculated that Sinofsky, a 23-year Microsoft veteran, would take the reins when Ballmer stepped down.

But according to insiders, Sinofsky and Ballmer didn't always see eye-to-eye.

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Future Microsoft Profits Rely on Critical Product Launches this Fall

There is a first time for everything, as we learned from the dro p in Microsoft profits the company reported yesterday (Thursday) after market close.

Microsoft Corp. (Nasdaq: MSFT) posted its first quarterly loss as a public company - breaking a 26-year record.

Now the company hopes its crop of new products launching this fall will not only boost profits, but edge out the strengthening competition.

"Microsoft is a very strong enterprise player," Tony Ursillo, an analyst at Loomis Sayles & Co. told Bloomberg News following the report. "There was lots of evidence in tonight's report that they are a force to be reckoned with in the enterprise."

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8 Reasons Why Mimi Would Sell Microsoft (Nasdaq:MSFT) and Dump Steve Ballmer

One day in 1983, my dad asked me a question over dinner after a long day at work.

He wanted to know what I knew about a little computer company called Microsoft. It was the brainchild of the son of one of his partners at Bogle & Gates, William H. Gates, Sr.

"Not much," I replied.

But I did tell my dad that I loved using MS-DOS in the computer lab with my friends. I was a card-carrying member of the nerd herd back in the day, so I spent a lot of time there and knew Microsoft's fledgling PC-based software pretty well.

My grandmother Mimi, though, had a different point of view. You've heard me mention her before.

She's the one who was widowed at an early age and became a savvy global investor long before people ever thought to look at the bigger picture.

Mimi didn't care that the buzz was about the MS-DOS language or even about computers. Having grown up in the Depression, she believed that what people would do with the technology was far more valuable.

She said she had confidence that Sr.'s son, Bill Gates Jr., understood this -- which is why she invested heavily in the Microsoft IPO in 1986. Enough said.

Today, though, I think she'd voice an equally strong opinion about Microsoft (Nasdaq: MSFT) CEO Steve Ballmer. In fact, I think she'd fire him. Here's why....

8 Reasons Why Steve Ballmer Must Go

  1. Ballmer took over Microsoft 12 years ago when the stock was about $60. Now it struggles to maintain $30. Microsoft has $58.16 billion in cash and this is the best Steve Ballmer can do?

  2. Office and Windows are dying. Once the business world's de facto standard, both are being replaced by cheap, easy-to-operate software, much of which is actually free as well as compatible. This is a big problem considering that, according to the Wall Street Journal, roughly 85% of Microsoft's revenue is coming from just two products: Windows and Office.

  3. The company isn't innovating fast enough or aggressively enough. What's more, it's attempting to compensate for its own shortcomings with increasingly ill-conceived acquisitions. For instance, Microsoft forked over $605 million for 18% of the Barnes and Noble Nook e-reader and still has no real ability to compete with Amazon's Kindle. It also couldn't seal the deal with Yahoo. Despite a sizable head start using Yahoo's core search technology, Bing has a mere 15% of the search market today. Ballmer waited nearly four years to respond to the iPad and his "Surface" tablet was ho-hum when it could have been jaw dropping. One more: Microsoft paid $8.5 billion in cash for Skype. Apparently the fact that Skype was not profitable didn't matter. Ballmer's track record suggests to me that he buys businesses that nobody else "must have."

  4. Microsoft's Internet offerings remain wannabes and are highly priced at that. Take Yammer. Microsoft just paid $1.2 billion through the nose to acquire a company that was valued at $600 million last fall when it raised $85 million in a venture offering. Team Ballmer plans to integrate it into Office on the assumption that somehow the Microsoft marriage will endear the brand to customers anxious to socialize business. I think they're delusional. Most Microsoft users I know, including myself, are actively planning to move away from the legacy software we've used for years the first instant we can in favor of software we actually like to use!

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Time to Like Microsoft (Nasdaq: MSFT)

Microsoft (Nasdaq: MSFT) is up almost 20% this year – so is it time to buy? Money Morning Chief Investment Strategist Keith Fitz-Gerald joined Fox Business' "Varney & Co." to talk about this rise. Fitz-Gerald also talked about Yahoo (Nasdaq: YHOO) and its increasing pile of issues. To find out what to do with these […]

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