microsoft stock quote
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Buy, Sell or Hold: Is Microsoft Stock About to Break Out of Its 10-Year Slumber?
Microsoft Corp. (NASDAQ: MSFT) is the world's largest software company. It's also the world's largest afterthought for most investors.
"It's an ancient relic," they say, "Apple and Google are the only games in town."
Or there is always this complaint: "Microsoft has no attractive products and there is no growth"...blah, blah, blah.
This ongoing apathy is one of the reasons why Microsoft stock has been stuck in the doldrums for years.
But if you are willing to look a little deeper, you'll discover this sleeping giant is coming out of its long slumber - and it's hungry.
Don't get me wrong, I'm not going to try and convince you that Microsoft is ready to change its stripes and become a full-scale growth company. Microsoft is what it is - the seller of the market-dominant PC operating system, Windows, and the seller of the market-dominant workplace productivity software, Office.
However, it does have the potential to become a major competitor in future growth markets like smartphones, tablets and enterprise solutions.
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Why the Fate of Microsoft Stock Hinges on Windows 8
Any hope of jolting Microsoft stock out of years of stagnation lies with the success of its latest attempts to capture a slice of mobile computing.
Microsoft Corp. (Nasdaq: MSFT) is only a bit player in mobile, currently dominated by devices running Apple Inc.'s (Nasdaq: AAPL) iOS and Google Inc.'s (Nasdaq: GOOG) Android. That's why the company now has a new mobile strategy, with the focal point being Windows 8, the latest version of Microsoft's dominant computer operating system.
Windows 8 is optimized for the mobile devices such as tablets and smartphones that have stolen the thunder from traditional PCs, a market Microsoft long dominated.
Microsoft has also ventured into mobile hardware with its new Surface tablet.
Now Microsoft is betting that the Surface tablet will turn heads and that Windows 8 will put it back in the mobile OS game by luring hardware makers away from Android.
"I don't control the macro-environment, but there's a huge opportunity in the explosion of devices," Microsoft Chief Financial Officer Peter Klein told Reuters. "There's demand for compelling devices and a connected set of cloud experiences. That's what Windows 8 is all about."
The Redmond, WA-based company must succeed in mobile to secure a new source of growth capable of moving Microsoft stock out of the doldrums where it has languished for more than a decade. The current 10-year return for MSFT is -6.39% -- yes, negative. Rolling back to November 2001 puts the return on Microsoft stock at -15.75%.
Owners of Microsoft stock can only cross their fingers and hope the bet pays off.
How Mobile Success Could Help Microsoft Stock
Microsoft had little choice but to shift its attention to mobile computing. That's where the money is in tech today.
Apple's profits have soared from about $2 billion in FY 2006 to $41.7 billion in FY 2012, almost entirely on the strength of the iPhone and iPad.
More recently, Korean-based Samsung Electronics (PINK: SSNLF) has emerged as the dominant Android hardware maker, with its profits rocketing 91% in the September quarter on strong sales of its Galaxy series of smartphones.
Sales growth in mobile devices has soared over the past few years. Research firm Gartner expects combined global sales of tablets and smartphones to reach 821 million units this year and rise 46% to pass the 1.2 billion mark next year - triple that of global PC sales.
So far Microsoft hasn't been able to grab much of this market, with its Windows operating systems on just 2.4% of smartphones, and about 4% of tablets.
But these projections by research firm IDC see that changing with Windows 8...
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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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