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Microsoft was recently added to the Vestact list of recommended stocks in New York portfolios. There are already quite a lot of clients who own them, but now it will be suggested to those entering the market with fresh funds. We will also write about them in this newsletter more often, in the months and years ahead.
The company is very well known for its Microsoft Office 365 suite of products, its operating system software, its cloud hosting service called Azure and for making devices like the Xbox and Surface tablets. Of course, everyone also knows that it was founded by one of the best humans, Bill Gates. He's working full-time on health issues these days, and the company has been run by the talented Satya Nadella since 2014.
Microsoft had first quarter results out late yesterday, and they were predictably, very good. This is another mostly digital business that is well placed to thrive despite the Covid-19 mess. Quarterly sales and profit rose more than estimates, thanks to higher demand for internet-based software and cloud services needed to accommodate a shift to remote working. Windows PC-software, server operating software and Surface device units did better than the company had projected.
The only minor blemish that I could see was a decline in advertising revenue at LinkedIn, the corporate social network and job-finding website which they own for some reason. That will be back in action later this year as the post-Covid rehiring spree kicks in, I'm sure.
Microsoft shares rose about 2.5% in after-hours trading following the report. They closed at $177.43 during the normal trading session. This may be surprising, but their shares are up by more than 13% in 2020. Microsoft has a market value of $1.35 trillion, making it the most valuable publicly traded company.
Don't worry that you have left it too late to buy this one. In my experience it's never too late to buy a winner, especially a company that continues to re-invent itself, and sells the subscription products that humanity really needs.