Microsoft Shows Signs Of Revival Amid Push Into Cloud


Software giant Microsoft is getting support at its 10-week line for the second time since its June breakout.

It would normally put the stock in a secondary buying range, but you'd like to see stronger volume as it lifts off its key support line.

Microsoft ( MSFT ) is showing signs of life after years of stagnation. The stock has risen every month but one since the company named Satya Nadella chief executive in early February, replacing Steve Ballmer. It's up 19% this year, easily outpacing the S&P 500 and just below a 14-year high.

Meanwhile, Microsoft's long-term dividend growth rate is a robust 19%. The annual dividend of $1.12 a share yields 2.5% at the current stock price of 44.79, well above the S&P average of 1.91%. The latest increase in the quarterly payout came in Q1: a hike of 5 cents, or 22%, to 28 cents a share.

Yet the maker of the Windows operating system, Xbox game machines and mobile devices such as the Surface computer continues to struggle while Nadella tries to engineer a turnaround.

On July 22, Microsoft reported that Q4 profit slid a greater-than-expected 21% from the same period last year due to losses at its recently acquired Nokia phone unit.

However, revenue climbed 81%, beating Wall Street forecasts, thanks to Microsoft's growing cloud business.

Microsoft plans to reduce its reliance on smartphones and Xbox machines to focus instead on mobile apps and cloud services, which allow customers to store and access data online rather than on a hard drive.

Microsoft is also moving into smart home systems that allow customers to monitor and control appliances, lights and other devices. But it faces competition fromApple ( AAPL ) andGoogle ( GOOGL ) in that fast-growing market.

Profit at Microsoft is expected to edge up 5% to $2.72 a share in the fiscal year that ends in June 2015, picking up to an 18% gain the following year.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: MSFT , AAPL , GOOGL

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