Microsoft, the tech giant of the U.S., just completes its best year in a decade since 2009 – especially when it comes to stock price performance. On Tuesday, the firm’s shares ended trading at around $157.70, increasing its gains for 2019 to about 55.3%, making this the best year of stock since 2009 when gains escalate 56.8%. The shares of Microsoft were over 417% higher from the decade – not quite the 9,562% increase of the 1990s, which saw the inauguration of Windows 95, whereas easily overshadowing the 2000s when Microsoft arose from its big antitrust case.
S&P 500, Nasdaq Composite and the Dow Jones Industrial Average also soared in the 2010s during the lengthiest economic expansion in the history of the United States. The Nasdaq performed the other two indices with about 295% growth. Microsoft did not grow as greater as some other S&P 500 constituents such as Amazon, Netflix and Broadcom. On the other hand, Microsoft was worth more than all these three companies, with a market capitalization of around $1.20 trillion. Only the tech giant Apple and oil facility Saudi Aramco are worth more.
In 2019, Microsoft was the main contributor to the S&P 500’s rise, 2nd only to Apple. It contributed around seven per cent of the index’s gains last year. The outcome of the stock reflects the evolution of Microsoft. During the last ten years, the firm experienced leadership changes and strategy shifts and achieve its greatest acquisition yet. This year the tech giant has built on those evolutions besides investors are expecting companies all over the world upgrade to the newest technology of Microsoft. However, regulators watched afresh at Apple, Amazon, Facebook and Alphabet in recent months, Microsoft mainly escaped their enquiry this time around.
Microsoft going to stop Windows 7 support
From January 14, 2020, Microsoft will stop releasing security patches for its Windows 7 after almost its ten years of release in 2009. This move will force the worldwide companies to pay out a lot of money so that their employees can work on the latest platform of Microsoft, Windows 10. In the 1st quarter of the 2020 fiscal year of Microsoft, the revenue of Windows OEM Pro grew 19%, the speedy growth since 2014. Firoz Valliji and Mark Moerdler, the analysts at Bernstein Research, estimated in a note that Windows OEM Pro indicates the overall sales of Windows licenses for commercial computers, and it reflects 46% of overall Windows revenue of Microsoft. The analysts have the correspondent of a purchase rating on Microsoft stock.
End of some Server product updates
Microsoft will stop releasing the SQL Server 2008 database software support in July. Whereas, the Windows Server 2008, as well as Windows Server 2008 R2 operating systems, will end to receive updates on January 14, 2020. Worldwide organizations started to move to the latest products, and that helped Microsoft to boost the revenue of Server products and cloud services. In the first quarter of Microsoft’s fiscal year 2020, the category grew by 30%, and that’s saying something, as it is the biggest main service or product in terms of revenue. Cloud services and server products also include the Azure public cloud.
Government business of Microsoft
Possibly this year the good news for Microsoft was scoring the Joint Enterprise Defense Infrastructure (JEDI), agreement to provide Azure cloud services to the Defense Department, a contract that might worth over $10 billion. The top cloud infrastructure provider, Amazon Web Services and the vendor that some people wanted to win the contract is protesting the award, whereas, for instance, Microsoft is the recipient of one of the most important government IT contracts in recent memory. Should Microsoft grip onto it, a cloud-snowball effect might take hold, and the win might attract some other business.
Round Four of Console Wars
Gaming giver about 9% of the overall revenue to Microsoft. The firm is not about to leave the market. Even as it’s going to launch a game streaming service, Microsoft is making plans to launch its 4th-generation console, the black Xbox Series X with black refrigerator-shape, in the holiday season of 2020. According to a research director at industry analysis company IDC, Lewis Ward, in the 2010s Xbox One consoles never be able to exceed 32% of overall console shipments and were continuously outsold by PlayStation 4 of Sony. Recently, Phil Spencer told GameSpot that they like to stay at the top in power and performance, and they achieve this position again.
Microsoft was the biggest holding in investment bank Large Cap Growth Fund of William Blair at the end of the third quarter, at above 9%. A portfolio manager of the fund, Jim Golan told CNBC that the twenty-year-old fund bought the stock of Microsoft after Nadella took over based on the potential of the company in the areas such as cloud and artificial intelligence (AI). Golan says that they are very happy with the investment. According to him, Nadella changing the approach and refocusing the firm on key growth areas has really instrumental in terms of pouring the performance that they observe during the last several years.
He added, in the future, the adoption of cloud services will be the primary driver for Microsoft, and the firm would able to grow its margins as Azure gains scale.