Microsoft Shares Hit All-Time High
October 21 2016 - 10:08AM
Dow Jones News
By Jay Greene
Shares of Microsoft Corp. jumped to an all-time high Friday in
the wake of a positive earnings report, nearly 17 years after
setting its previous high-water mark in the heyday of the dot-com
boom.
The stock traded at $60.30 just after the stock market opened,
up 5.3% and eclipsing its previous midday trading high of
$59.97.
In December of 1999, Microsoft shares closed at their highest
level, $59.56, adjusted for a 2003 stock split. Back then, the
stock soared on the software giant's dominance of the PC operating
system market and productivity applications. The company was riding
the wave of internet use, which boosted demand for its
software.
But as the dot-com bubble burst, Microsoft shares slid and then
stagnated for nearly 13 years as the company wrestled with
antitrust regulators and lagged rivals such as Apple Inc. and
Alphabet Inc. on emerging tech trends such as mobile computing and
web search.
Investors often blamed then-Chief Executive Steve Ballmer for
the company's challenges. The stock started to rally in the summer
of 2013, about the time that Mr. Ballmer announced he would leave
Microsoft.
His successor, Satya Nadella, has unwound some of Mr. Ballmer's
failed efforts, notably writing off most of the $9.4 billion
acquisition of Nokia Corp.'s handset business. Instead, Mr. Nadella
has focused the company's efforts on cloud computing, tapping
longstanding relationships with corporate customers to convince
them to use Microsoft's web-based, on-demand Azure services.
While Amazon.com Inc. dominates the market, Microsoft has
emerged as the online retailer's stiffest competition. For the last
year, revenue from Azure has doubled compared to the year-earlier
period each quarter.
Mr. Nadella, on the company's earnings conference call Thursday,
highlighted the progress of the company's cloud business.
"Once enterprise customers choose one of our cloud services,
they continue to adopt more services," he said. He noted that
Microsoft's cloud business has annualized revenue of more than $13
billion and that the company remains on track to expand that to $20
billion in fiscal 2018.
Microsoft shares began their latest rally three months ago,
after the company posted better-than-expected fiscal fourth quarter
results on the strength of its cloud business. The stock popped
again in after-hours trading Thursday after first quarter results
showed Microsoft continuing to successfully transition its business
to the cloud.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
October 21, 2016 09:53 ET (13:53 GMT)
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