Microsoft (MSFT) was once a hot growth stock. It was once a hot yield stock.
Now it's a hot battleground stock.
By that I mean you can find as many people thinking it's on its last legs as those who think it's about to double in value thanks to innovation. Count Gregory Vousvounis among the latter camp. In his well-researched article from today he describes 10 interface technologies described at the company's TechFest event, which, he strongly believes, make it "a solid investment with very little downside risk but great potential."
Here's a second point of interest. Bing continues to gain share in search through alliances, like a new one announced with Pinterest. The largest such alliance is with Facebook (FB), with Bing now the default when graph search doesn't pull up any results. To that I should also add Microsoft's work with Fairsearch. Put simply, Microsoft is leading a charge by tech rivals to take down Google (GOOG) before the world's governments, on all technologies. The aim, it seems to me, is to saddle Google with as many lawyers and bureaucratic "naysayers" as live in Redmond. And so far, they're going a great job.
Still, you have the fabled death of the PC. Sales plunged 14% from a year ago, according to IDC, with Gartner finding an 11% decline. Even high-end models, like Lenovo's 2.9 GHz All-in-One with a 1 terabyte hard drive, are now available online for under $500. You'll spend more than that on an iPad with just 32 gigabytes of storage. To that must be added the cloud. Amazon (AMZN) could bring in $10 billion in cloud revenues in 2016, twice that in 2020, according to two new research reports. The first, by RW Baird, says that will represent $40 billion in losses to traditional client-server companies. Like Microsoft. Microsoft has a play in this space, of course, dubbed Azure, but it's trailing Amazon badly.
Right now, this means Microsoft is going sideways. Which way it breaks will depend heavily on its next earnings report, now due out Thursday. Yahoo says analysts are expecting $20.56 billion in revenues and earnings of 68 cents per share. But Earningswhispers.com says the actual estimate is 56 cents and the whisper number is 60.
My spidey sense says that someone is trying to talk those numbers down. My own guess is we're primed for disappointment. But I'm out of Microsoft, because I only play long and I look at stocks over five years. What do you think?