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Last week, I noted that one of the 10 tools for coping with the new bear market is to put together a watchlist of great tech stocks you'd like to buy.
The idea here is to get set up for when the market turns our way again. At this point, I have no doubt that the market will rebound as it always has in the past.
But by definition, this choppy, news-driven market greatly increases the risk of getting in too early. To avoid doing just that, I recommend looking for tech leaders that you would like to own for the long haul.
That means giving each one a thorough checkup to make sure that prior to the correction, they had a great track record of earnings gains.
With that in mind, today I want to reveal a tech leader that I feel should be on everyone's watch list...
A Miraculous Comeback for Microsoft Stock
Now then, there's a former laggard that had recently become one of the market's top leaders. Along the way, it amassed a market value of roughly $1.4 trillion.
But when it became one of the first in the sector to warn of a sales decline brought on by the coronavirus and exposure to China, the stock got hammered.
Get Your Buy List Ready: COVID-19 has crushed markets, but stocks will bounce higher. This is a once-in-a-lifetime chance to get into great companies at historically low prices, so put these stocks on your buy list now...
From the time the S&P 500 entered into a correction on February 19 and March 23, Microsoft Corp. (NASDAQ: MSFT) lost more than 27% of its value.
Here's the thing; Mr. Softy is firing on all cylinders, and it gives investors multiple shots on goal. I'm talking about everything from defense and cannabis to the cloud and computing.
We can see the quality of its operations from its most recent earnings report, covering its second fiscal quarter.
Two words sum up its biggest boost during its second fiscal quarter ended December 31, 2019 - recurring revenue.
Its commercial cloud computing platform, Azure, and Office 365 helped smash expectations and send gross margins up 67%.
A Wedbush analyst recently told Investor's Business Daily that the earnings report was a 'masterpiece.' And a Bernstein analyst wrote, 'What more could you want?'
It bears noting that this was a company stuck in neutral for many years. That is... until Satya Nadella became CEO six years ago on February 4.
He reorganized and re-prioritized the company. He shut down unprofitable divisions and other operations that were not adding value to the current core business or the opportunities of the future.
He shifted the company from the old dependence on PC software to a cloud-based model that focused on subscriptions and recurring revenues.
And he built a cloud platform that has since become a fierce competitor to the once-dominant Amazon Web Services. Yes, Amazon remains the leader in cloud-hosting but Microsoft now ranks second and is coming on strong.
Ironically, as an organization, Microsoft's leadership didn't seem to know what to do with its Azure cloud unit before Nadella became CEO.
But as the saying goes, that was then and this is now...
Innovating and Consolidating
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.