At a point where investors should be excited over big revenues from Windows 8 licensing, Ballmer is telling them they're going to be everything Apple (NASDAQ:AAPL) is, only less so. I think investors are misinterpreting Ballmer's remarks, however, and looking at it only as a consumer stock, rather than what it is -- an industrial stock.
Microsoft's revenues come less from the PC market and games than from the enterprise arena. The big enterprise transition right now is from client-server technology to cloud-device systems. No industrial supplier is better positioned to lead that than Microsoft. It's the big supplier of what they've got, and a major supplier of what they want.
This is the story Microsoft should be emphasizing to analysts, but reporters just want to know about consumer markets and phones and tablets, which is where Microsoft remains a poor third behind Apple and Google (NASDAQ:GOOG). You might even call Windows a No. 4 in that arena because of the rise of Amazon (NASDAQ:AMZN).
I think what you're going to see is a surprisingly strong quarter for Microsoft in the enterprise. The transition to cloud-based software is going to tie customers even more closely to the Azure cloud than they're tied now. Microsoft's marketing head, Keith Lorizio, is predicting the company will move 530 million copies of Windows 8 over the next year, with the PC strength creating a growing device market. This will eventually provide a wide channel Microsoft can advertise to, making the company a lot more like Google than anyone imagines now.
Ballmer's reign is going to rise or fall on whether Lorizio is right. My guess he's closer to being right than the cynics believe, and that at present levels Microsoft is a buy.
Disclosure: I am long MSFT, GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.