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Microsoft Corporation (MSFT) Making the Right Moves, Building Momentum Under Nadella

Microsoft Corporation (NASDAQ:MSFT) is building momentum under CEO Satya Nadella. And after mostly languishing in the mid-$20’s for much of the past decade, so too is their stock. Microsoft Corporation (NASDAQ:MSFT) is already up 24.45% year-to-date, and 39.72% over the last calendar year, and as MarketWatch reports today, there are plenty of reasons to remain bullish on their prospects going forward.

microsoft msft

The shift in momentum began last year when then-CEO Steve Ballmer announced he would be stepping down, to be replaced by Satya Nadella. Soon after taking the reins Nadella announced a bold plan to cut 18,000 jobs from Microsoft Corporation (NASDAQ:MSFT)’s workforce, about half of which came from their Nokia division. The cuts were received favorably among investors and analysts as a necessary step to clean up some of the bloated infrastructure left behind in Ballmer’s wake.

While Nadella shifted some of the focus off their mobile division, including those broad cuts to the Nokia division, the article suggested there is still the potential for Windows Phones to grow their small market share and be the third player to Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOGL) in that sphere.

Most recently, Microsoft Corporation (NASDAQ:MSFT)’s purchase of Minecraft developer Mojang for $2.5 billion has the potential not only to help their gaming division, but that mobile division as well, by giving them exclusive rights to one of the biggest hits in mobile gaming.

The gaming business as a whole is beginning to take on more significance as Microsoft Corporation (NASDAQ:MSFT) has trimmed the fat from other areas of their operations, and the Mojang purchase looks like a greater commitment yet still to that space. Despite being a major player in gaming for over a decade, Microsoft Corporation (NASDAQ:MSFT) has made few major acquisitions in that space, with their most notable and successful acquisition before the most recent one being their purchase of Bungie, of Halo and Destiny fame, back in 2001.

Lastly, technicals point to strength in Microsoft Corporation (NASDAQ:MSFT)’s operations. They have $85 billion in cash and investments, a very fair valuation of just 11 times forward price to earnings ratio, and recently increased their quarterly dividend by 11%, which continues a trend of the company boosting dividends and buying back stock.

Other analysts have also put out bullish calls on Microsoft Corporation (NASDAQ:MSFT), including RBC Capital and Barclays, who both raised their price target on the stock this week. Microsoft Corporation (NASDAQ:MSFT) entered the day’s trading at $46.52.

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