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Wall Street investors are seduced by an emerging technology company.
This has nothing to do with displaying selfies or looking for a soul mate. Instead, the company earns billions of dollars selling cloud computing services and other technical services to offices around the world.
Say hello to Microsoft, the 90s home computing powerhouse that is currently experiencing a renaissance moment – eclipsing Facebook, Google, Amazon, and other techies of the last decade.
And now, she's about to outdo Apple as the world's most valuable publicly traded company.
Yes, this Microsoft. As other technology giants stumble, its continued resistance is bearing fruit.
Microsoft almost even eclipsed Apple – and did it briefly several times this week – would have been heard a few years ago.
However, under the leadership of Microsoft CEO Satya Nadella, Microsoft has found stability by moving away from its flagship Windows operating system and focusing on cloud computing services with long-term contracts.
"They finally made the leap and became a viable cloud player," said Daniel Morgan, Senior Portfolio Manager at Synovus Trust. "They left the workstation very well."
A brief trading period November 26 was the first time in more than eight years that Microsoft was worth more than Apple. Microsoft again briefly overtook Apple on November 27, before Apple took the lead with a market value of $ 827 billion (RMB 3.46), just 0.5% higher than its 822 billion capital. billion US $ (RM3.44tril).
Apple is the most successful company in the world since the first place won by Exxon Mobil at the beginning of the decade. Microsoft has not been at the top since the peak of the Internet business boom in 2000.
Microsoft has become a competitor largely because Apple's shares have fallen 25% since early October, while Microsoft has not done worse than the rest of the stock market. But the fact that it has not gone bad is a reflection of his constant interest in commercial clients in recent years.
Only a few years ago, Microsoft's prospects looked bleak. The company depended on Windows operating system license fees for personal computers, but people were spending more money on the latest smartphones. In 2013, PC sales plunged 10% to about 315 million, representing the worst drop of a year on the other, according to research companies Gartner and IDC. Microsoft's efforts to make computers more like phones, Windows 8, did not help.
However, a turnaround began when Redmond, Washington, promoted Nadella to the position of CEO in 2014. He took over from Steve Ballmer, CEO of Microsoft, who at first made fun of the idea that people would be ready to pay US $ 500 (or more) for IPhones from Apple.
This bet has paid off. Windows is now a decreasing fraction of Microsoft's business. Although the company still operates consumer-centric businesses, such as Bing Search and Xbox, it gives priority to professional services, such as Office e-mail and other workplace software, as well as new additions such as LinkedIn and Skype. But its biggest growth took place in the cloud, especially the cloud platform called Azure. Cloud computing now accounts for more than a quarter of Microsoft's revenue and Microsoft rivals Amazon as the leading provider of this type of service.
Less reliance on consumer demand has helped Microsoft protect itself from the turmoil of the holiday season and tensions over the US-China trade war that is affecting Apple and other tech companies.
US President Donald Trump amplified these tariff concerns when he said The Wall Street Journal in an article published Monday night, the new rates could affect iPhones and laptops imported from China.
The iPhone maker had already seen its stock dip after announcing mixed quarterly results earlier this month, as the tech industry feared the situation facing threats such as rising rates of interest, the increase in government regulation and the intensification of trade war between Trump and China.
Apple has also scared investors with an unexpected decision to no longer disclose the number of iPhones sold each quarter. This move has been widely interpreted as a sign that Apple is planning further drops in iPhone sales and is trying to mask it.
While smartphones caused the slowdown of personal computers several years ago, smartphone sales themselves have now stagnated. In part, this is because with fewer innovations than previous models, more people are choosing to keep devices for longer before upgrading.
Morgan said that Microsoft outperforms its technology competitors partly because of what it does not do. It is not subject to as stringent regulatory scrutiny as Google and Facebook, who are thirsty for publicity, have been controversial about their data collection practices. Unlike Netflix, it is not looking for a decreasing number of international subscribers. And while Amazon also has a strong activity in the cloud, it is even more dependent on online retail. – AP
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