It's hardly news that value plays in tech don't often work out as well as value hounds would hope. Simply put, almost nobody cares to own value-priced tech names absent some brighter prospects for growth. There is no doubt that Microsoft (Nasdaq: MSFT) faces numerous challenges in maintaining its status with consumers and enterprises. But are those challenges really so formidable that this stock should carry multiples more commonly associated with commodity companies like Rio Tinto (RIO) or BHP Billiton?
The Bear Case
The problems with Microsoft can be summed up in a few words – Apple (Nasdaq: AAPL), Google (Nasdaq: GOOG), VMware (NYSE: VMW), ARM Holdings (Nasdaq: ARMH). More broadly, I mean that Microsoft's core businesses are under stress and threat from the advent of mobile devices that don't run Windows or other Microsoft products and that are replacing PCs that do. What's more, Microsoft has to deal with the migration to a cloud/software-as-a-service based model, increasing amounts of freeware, and just a general shift in IT to a brand new world.
Please click here for more:
Microsoft: Does It Deserve Commodity Company Valuation?
No comments:
Post a Comment