Microsoft Looks Like An Elephant That Can Still Dance

Very large companies tend to struggle to innovate and grow, and large tech companies in particular historically have a very hard time remaking themselves over time. With that, yesterday’s leaders in tech are seldom today’s leaders and today’s leaders seldom become tomorrow’s leaders.

And then there’s Microsoft (MSFT). This company certainly has several missteps in its scrapbook, including multiple failures in mobile devices (phones especially), but with Azure, Office 365, and Dynamics 365, Microsoft looks to be in a good place with respect to cloud computing, and businesses like LinkedIn and Xbox offer additional avenues to growth.

It is admittedly hard to come up with a novel scoop or thesis on a huge, well-covered stock like Microsoft, but I have nevertheless large companies like this trade at attractive multiples and generate above-average returns. If my expectation of mid-single-digit growth is valid, a fair value of $90 or more seems appropriate and these shares are worth considering even late in this bull market.

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Microsoft Looks Like An Elephant That Can Still Dance