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Why Microsoft Stock Is Trading at an All-Time High

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Microsoft stock at an all-time high on the back of robust earnings

Microsoft (MSFT) stock hit an all-time high of $74.30 on Thursday, July 20, 2017, on the back of strong fiscal 4Q17 results, as we saw in the previous part. The company has been public for 31 years. It has a market cap of more than $572.0 billion, only behind Apple (AAPL) and Alphabet (GOOGL) with market caps of ~$800.0 billion and ~$700.0 billion, respectively. MSFT stock has risen 19.0% year-to-date.

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Microsoft has had to adapt to changes

One of the reasons behind MSFT stock hitting its all-time high is its cloud-computing segment. As we saw in the previous part of this series, Microsoft Azure revenue growth is on a roll. It rose 97.0% year-over-year in fiscal 4Q17. The company is second in the cloud-computing segment, well behind Amazon (AMZN). However, Microsoft Azure is growing much faster than Amazon Web Services. The company’s overall cloud business now accounts for ~22.0% of its total revenues.

Industry watchers have been surprised that Microsoft has managed to survive as consumers shifted from desktop computers to smartphones. Microsoft has adapted, offering software as a service instead of software sold in a box, which is how the technology giant became dominant.

However, technology becomes obsolete very quickly. Microsoft’s survival in the future will depend on how quickly it can adapt to the ever-changing world.

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