Markets
MU

Microsoft Corporation (MSFT) Stock Is Soaring Over Hapless Competition

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

After suffering through occasional bursts of choppiness and horizontal consolidation, Microsoft Corporation (NASDAQ: MSFT ) has enjoyed one year of robust bullishness. But with the latest rumblings within the consumer technology sector, should MSFT stock owners worry? After all, Apple Inc . (NASDAQ: AAPL ) hasn't fared well recently, and its technical posture leaves plenty to be desired.

3 Reasons Microsoft Corporation (MSFT) Stock Should Be a Core Holding

Source: Shutterstock

Fortunately, Microsoft stock is on the opposite side of the fence. According to a Bloomberg report, Apple's upcoming iPhone 8 will feature an out-of-date modem . Therefore, the iconic company is not able to utilize the latest network speeds of one gigabit of data per second.

You can love AAPL all you want - that's a major buzzkill.

Furthermore, its dicey relationship with its primary chipmaker Qualcomm, Inc . (NASDAQ: QCOM ) and the inability of secondary source Intel Corporation (NASDAQ: INTC ) to produce a gigabit compatible modem means that Apple is up a creek without a paddle.

Microsoft, on the other hand, generated substantial buzz with its latest video game console, the "Xbox One X." As reported by InvestorPlace contributor Brad Moon, MSFT announced that its newest release will be the "world's most powerful gaming console." With a starting price of only $499, that has got to worry Sony Corp (ADR) (NYSE: SNE ).

Indeed, the Microsoft "Xbox One X isn't just the world's most powerful game console, it holds that title by a wide margin - 40% more power than any other console, including the Playstation Pro."

Not coincidentally, MSFT stock sparked a revival following the Xbox's public debut. There's a reason why Microsoft is up nearly 1% for June, while AAPL is down more than 4%. You simply can't afford to disappoint consumers before they've even had a chance to ogle the product themselves.

MSFT Stock Firing on All Cylinders

Microsoft just isn't in the mood to make amateurish mistakes. While Apple is having a PR nightmare with their iPhone 8, the enthusiasm for its console giant keeps building. On June 16, GameChangers editor Hilary Kramer wrote "Even though the Xbox One X may not be setting Wall Street on fire right now, it has critical mass building behind it in terms of gamer buzz. We've only known the official product name for the last three days and the internet is already lit up with 2.4 million hits."

As a Microsoft stock investor, you have to love the audacity with which they're going after Sony. Even as a long-time SNE shareholder myself, I admire MSFT's pugnacious attitude. Ultimately, I think it's a wonderful move for the gaming industry as it incentivizes companies to push the technological envelope.

However, the mark of a great organization is to never be satisfied with any one product or business. While I'm sure the Xbox One X will be a massive hit for Microsoft stock, I also love their ventures into cloud computing.

According to InvestorPlace'sIan Bezek , "The commercial cloud business has now reached a $15 billion annualized run rate, according to the recent earnings report. That figure is up 50% compared to last year. Profit margins are also on the incline for this unit. Given the generous amount of value investors have assigned Amazon.com, Inc . (NASDAQ: AMZN ) and its web services division, it's easy to see how Microsoft's exploding cloud revenue can power MSFT stock even higher."

Further affirming their diversification away from traditional platforms, Microsoft is working on a blockchain-powered global supply chain automation program. Unless you've been living under a rock, you already know that the blockchain will revolutionize finance and commerce.

Microsoft Is Sucking Oxygen From Its Competitors

In all areas, whether planning, innovation, or execution, Microsoft has really come alive under CEO Satya Nadella. Although Apple is traditionally the company that runs on sex appeal, its MSFT that has stolen its thunder. If the folks at 1 Infinite Loop commit another unforced error, Nadella and company will make them pay.

Click to Enlarge Microsoft's recent dominance is evident in the technical charts. Over the trailing year, MSFT stock has charted a trend of higher highs and higher lows. Even in volatile June, the price action remains above its 50-day moving average.

Unless you foresee something that would upset that dynamic, I wouldn't sweat MSFT stock.

Wall Street is picking its winners and losers following the recent tech correction, and Microsoft clearly belongs in the former. With brilliant products and even more brilliant execution, I expect further bullishness throughout the remainder of this year.

As of this writing, Josh Enomoto was long SNE.

More From InvestorPlace

The post Microsoft Corporation (MSFT) Stock Is Soaring Over Hapless Competition appeared first on InvestorPlace .

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


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

In This Story

MU QCOM MSFT INTC AAPL

Other Topics

Stocks

Latest Markets Videos

    InvestorPlace

    InvestorPlace is one of America’s largest, longest-standing independent financial research firms. Started over 40 years ago by a business visionary named Tom Phillips, we publish detailed research and recommendations for self-directed investors, financial advisors and money managers.

    Learn More