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Can Microsoft (MSFT) Stock Reach the Clouds?


Microsoft (MSFT) is back on top — well, sort of.

The maker of the world’s most popular computer operating system and productivity suite briefly surpassed Apple as the world’s most valuable company, the first time since 2010 it was valued more than its archrival. While short lived, the two companies (along with Amazon), are in a fierce battle for that coveted (though symbolic) number one spot.

Wedbush’s Daniel Ives expects Microsoft to continue competing in 2019, as he maintains his Buy rating and $140 price target, more than 30% higher than the company’s current stock price. (To watch Ives’ track record, click here)

Ives believes Microsoft is in an “enviable position” as we head into 2019, citing factors such as the company’s Office 365 productivity program and Azure cloud computing software. The analyst expects that 55% of work will be in the cloud in 2022 (up from 30% this year), and believes Microsoft is in the “catbirds seat to get more of these complex workloads”. While Amazon’s AWS is still the leader in the cloud, the analyst believes Microsoft is “starting to close the gap.”

Ives remains bullish on Microsoft in 2019 as “Azure’s cloud momentum is still in its early days”, while Office 365 growth should provide “tailwinds for the next 12 to 18 months at least.” Ives also anticipates that Microsoft will “further transform…into a cloud behemoth” in the coming years, and expects the company to “convert enterprises to the Azure/cloud platform”, which will contribute to the company crossing the trillion dollar market cap.

Overall, Microsoft is a Wall Street favorite, earning one of the best analyst consensus ratings in the market. TipRanks analytics exhibit MSFT as a Strong Buy. Out of 20 analysts polled in the last 3 months, 20 are bullish on Microsoft stock while only 1 issues Hold. With a return potential of nearly 18%, the stock’s consensus target price stands at $124.32. (See MSFT’s price targets and analyst ratings on TipRanks)