Software giant Microsoft has earned plaudits for its successful pivot from desktop computing to cloud computing. And MSFT stock has risen as a result. Many investors may be wondering: Is Microsoft stock a buy right now?
Bill Gates and Paul Allen started Microsoft in 1975 at the dawn of the personal computer era to make PC operating system software. The company’s Windows operating system came to dominate the PC landscape. Microsoft expanded over the years into productivity software, server software, internet services, video games and PC hardware and accessories.
Current Chief Executive Satya Nadella took the reins of the Redmond, Wash.-based company in 2014 and led Microsoft full steam into cloud computing.
The company’s cloud offerings today include Azure infrastructure services, Office 365 productivity software and Dynamics enterprise software. Microsoft also owns LinkedIn, Skype and GitHub.
MSFT Stock News: JEDI Contract Win
In October 2019, Microsoft beat out heavily favored Amazon.com to win a major U.S. Defense Department cloud-computing contract. The contract, known as JEDI, or Joint Enterprise Defense Infrastructure, is worth $10 billion over a 10-year period. Amazon protested the contract award, saying President Donald Trump’s bias against the e-commerce giant steered the Pentagon’s decision-making toward Microsoft.
On Sept. 4, the Pentagon reaffirmed its decision to award the JEDI contract to Microsoft. In doing so, it defied a court decision that had blocked the contract from proceeding. Amazon has vowed to continue its legal fight over the contract.
Amazon.com’s Amazon Web Services is the world’s largest provider of cloud infrastructure services. In the third quarter, AWS had 33% market share, according to Synergy Research Group. Microsoft is a distant second with 18% market share. Other major players include Alphabet unit Google Cloud Platform, as well as China’s Alibaba and Tencent . Overall spending on cloud infrastructure services neared $33 billion in the third quarter, Synergy said.
Microsoft Stock Fundamental Analysis
On Oct. 27, Microsoft smashed Wall Street’s targets for its ended Sept. 30, thanks to strong demand for its cloud computing products. However, its sales guidance for the December quarter was a tad light. MSFT stock fell 5% on the news the next day.
Microsoft earned $1.82 a share, up 32% year over year, on sales of $37.15 billion, up 12%, in the September quarter. Analysts expected Microsoft earnings of $1.54 a share on sales of $35.72 billion.
Is Microsoft Stock A Buy Right Now?
Microsoft stock is not a buy right now, but it soon could be. Over the past 13 weeks, MSFT stock has been with a buy point of 232.96. It ended the regular session Nov. 25 at 213.87.
An alternative reading of the Microsoft stock chart shows that it has formed a handle within the consolidation. That would give it an earlier entry point of 228.22.
However, the stock market has been unsettled lately, so be sure to check the . Consult for the current market trend.
Also, it has an of D-, indicating institutional selling. The rating, on an A+ to E scale, measures institutional buying and selling in a stock over the past 13 weeks. A+ signifies heavy institutional buying and E means heavy selling.