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Why Microsoft Stock Is at All-Time High

Sanmit Amin - Author
By

Sep. 24 2018, Updated 9:40 a.m. ET

Microsoft has been outperforming FAANG stocks lately

While FAANG (Facebook, Amazon, Apple, Netflix, and Google) stocks have been struggling lately, Microsoft has risen to an all-time high. The stock is currently trading around $114. Microsoft (MSFT) is now the third most valuable public company in the world and has overtaken Google-parent Alphabet (GOOG). Microsoft has a market cap of around $876 billion, while the search giant’s market cap has fallen to $818 billion.

Microsoft’s cloud business has seen robust growth, and its transition to the SaaS (software-as-a-service) platform seems to be reaping rewards for the company. Meanwhile, its core business is doing better than expected in light of sluggish PC sales.

Microsoft’s gaming business could also gain traction with the launch of Xbox Game Pass and Xbox Live.

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Microsoft’s earnings growth is likely to accelerate

Analysts have become more bullish on the stock and expect earnings growth to accelerate, while its balance sheet remains solid. The company will be hosting its Ignite conference in Orlando between September 24 and September 28. Microsoft could focus on cloud technology during the event.

The company’s stock is up 1.8% in September, while the tech-rich Nasdaq Composite Index is down 1.4% this month. FAANG stocks have seen steeper declines. Microsoft’s stock is up 33.2% year-to-date (or YTD).

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