Microsoft stock prices, once a sore point for the company and perhaps the main reason that Steve Ballmer is no longer CEO, have rebounded recently, buoyed by renewed energy introduced by new CEO Satya Nadella and Microsoft's position as a leader in cloud computing, which is becoming a darling of Wall Street.
This morning, financial investment firm Goldman Sachs upped their rating on Microsoft from "hold" to "buy," and set a target price for the company's stocks at $68. Microsoft's stocks have been trading at just under $60, so the target would mean about a 15% upsurge in the company's value.
StreetInsider quotes Goldman Sach's Heather Bellini on Microsoft's Azure upside:
"Azure is the #2 market share vendor in the cloud space, and has grown 100% or more yoy eight of the last ten quarters, and in fact growth accelerated in C3Q16. With a large Microsoft customer base and strong C-level relationships, we believe Azure can continue to grow revenue and improve margins over time. Our views are supported by channel partners as well, who have commented recently that they are seeing strong uptake of Azure amongst enterprise customers, particularly as it relates to hybrid cloud," said Bellini.
Microsoft received a strong push from the market after its latest earnings, and continues to do well with Azure, with Office 365, with a changing perception of the company as "the new Microsoft," and with some good PR coming from its popular Surface line of computers, and even from getting some Linux love.
Goldman Sachs expects the company to earn $102 billion in fiscal year 2018, and climbing to $111 billion in FY '19. Do you think good times are ahead for Microsoft?