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Microsoft


Somehow Microsoft Corp. (NASDAQ:MSFTC) got it right, or at least mostly right. After years of underperformance, the pre-Internet software giant has figured out the post-desktop world.

The new era of cloud computing and the old era, including the Windows PC OS have done battle with cloud coming out ahead. Microsoft is reacting to that in a positive way.

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Almost Left In The Dust

As tech companies like Apple Inc. (NASDAQ:AAPLC) and Alphabet Inc.’s (NASDAQ:GOOGC) Google forged ahead, Microsoft almost got left behind. It was not alone. Others, including Intel Corp. (NASDAQ:INTCB) and International Business Machines Corp. (NYSE:IBMC) have struggled mightily.

Many in the Microsoft culture fought the transformation. The Wall Street Journal reported that some longtime Microsoft employees complained that the company’s legacy was being disrespected. Newcomers to Microsoft, including startups the company acquired challenged the old way of thinking.

Acquisitions Were Key

In his first 2 ½ years as CEO, Satya Nadella spearheaded 36 acquisitions. That’s almost 3 times the 13 previous CEO Steve Ballmer made in the previous 2 ½ years.

Last week Microsoft closed the largest one of all – a $26.2 billion deal for LinkedIn Corp. (:LNKDN/A). As with all of Nadella’s acquisitions, this one is for a specific purpose. In this case it has to do with expanding the reach of Microsoft Office products and connecting to LinkedIn’s extensive professional network.

Microsoft And Trump

As a result of its continuing relevance, Microsoft had a seat at the table when tech leaders met with President-elect Donald Trump last week. Of course, so did Intel and IBM, along with many others.

Microsoft did come to the table from a position of strength, enough strength to include in its congratulations to the incoming commander in chief a statement that included these words, “Our commitment to our mission and values are steadfast, and in particular fostering a diverse and inclusive culture.”

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Investing In A Tech Future

All of this is part of the reason Microsoft made the U.S. News list of the 7 best tech stocks for 2017. This despite the uncertainty of a new administration that has said it wants to punish companies – like Microsoft – with overseas untaxed funds.

Technology remains an opportunity and Microsoft, thanks to its investments and acquisitions is on the short list.

Current CEO Satya Nadella has been the difference maker, mostly by pointing Microsoft toward the cloud. Currently, for example, Microsoft Azure is second only to Amazon Web Services as a cloud platform. Azure revenue grew an unbelievable 116% last quarter.

In addition, MSFT pays a 2.5% dividend and repurchased $14.8 billion in stock in fiscal 2016.



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