Microsoft’s stock has been on a recent downward trajectory. The company recently completed its $19.7 billion acquisition of Nuance Communications, a leader in voice recognition software and conversational artificial intelligence. The acquisition will give Microsoft more clout in the health-care sector. While the company still has plenty of headwinds to face, it is viewed by investors as being a solid long-term investment.
The recent weakness in the stock was a reaction to news about the company’s first-quarter earnings, but the stock is not due to a bad quarter. Analysts’ estimates for Microsoft are based on the company’s past performance, which may not necessarily reflect its future results. As a result, Microsoft’s shares have fallen more than their competitors. However, investors should keep in mind that Microsoft’s growth prospects are not at risk, as its cloud and enterprise software divisions help businesses automate and fight inflationary forces. Furthermore, Microsoft shares trade at roughly 23 times this year’s earnings estimates, which translates to a high earnings yield. In addition, the recent rally in the yields of the U.S. Treasury has made Microsoft stock look like a bargain.
Employees can choose to purchase Microsoft stock at a discounted price through their Deferred Compensation Plan. The company offers employees the option to purchase Microsoft stock for up to 10% below its Fair Market Value. However, employees should be aware that the holding period may vary, and it is therefore important to review the details before investing.
Microsoft has recently made a pivot to cloud computing, which has earned the company plaudits and boosted the stock’s value. The company was founded in 1975 by Paul Allen and Bill Gates and has since grown into a company spanning a wide range of products and services, including productivity software, server software, PC hardware, and even video games. Its current CEO, Satya Nadella, stepped in as CEO in 2014 and has taken the company on full steam into the cloud computing arena.
Microsoft has three distinct business segments, which are reflected in their earnings. The software and cloud segment is the fastest growing, supported by the company’s global shift to the cloud. The company’s cloud platform, Azure, is ranked as the second largest cloud platform after Amazon’s AWS. These products play a key role in the lives of many people worldwide.
The company offers a wide range of services and solutions for consumers and businesses. Microsoft operates through three business segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. It also has a large gaming business, and search advertising revenues. This diverse portfolio enables Microsoft to compete in a number of fields.