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Microsoft's Horizontal Diversification Strategy Primes Them For Long-Term Growth

Apr. 11, 2021 7:07 PM ETMicrosoft Corporation (MSFT)22 Comments
BK Tan profile picture
BK Tan


  • MSFT appears to be contesting in many highly competitive markets, which might diminish long-term returns.
  • However, these high-growth industries allow them to stave off intense competition, giving them the opportunity to nurture assets into new pivots for growth, using resources from existing segments.
  • Their broader focus on horizontal diversification versus concentric diversification gives them a potential first-mover advantage in leveraging on new growth trends.
  • This style of diversification also exposes them to less political risk, which can lead to revenue stability.
  • Finally, a DCF analysis reveals that it is also undervalued at current prices, making it a very attractive investment after considering its qualitative factors.

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A Household Name

Microsoft (NASDAQ:MSFT) is a household name in tech, not only because it dominates our internal operating systems and the very productivity devices that we work and play on, but because it

This article was written by

BK Tan profile picture
I am an aspiring equity researcher with a passion for economics and fundamental analysis. I search for firms with stellar competitive strategies, whose qualitative and quantitative growth prospects justify their current valuation, as well as clearly undervalued picks for long term price appreciation.

Analyst’s Disclosure: I am/we are long MSFT, AAPL, BABA, FB, AMZN. 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.

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