This Is Why You Should Buy Microsoft On Dips

If you have a certain age, like me, remember when Microsoft (MSFT) was the essential technology stock. Then the iPhone appeared. It was a dark time.

Now the script has been flipped. The software giant of Seattle has recovered its rhythm. After its mobile debacle, prospects are improving, rising. Your business in the cloud is shooting up, and now you're putting a lot of pressure on artificial intelligence.

Microsoft is a must action again, for all the right reasons.

It would be easy to dismiss the company that Bill Gates built as an aspiring gray. Your business in the cloud is great, but nothing like Amazon Web Services. His search business, Bing, has become a line of entry for night comics. And its mobile business has been reduced to a series of applications designed to co-opt the user experience on iPhones and Android.

Forget about all that. What Gates built was a dominant computer franchise. Most of the corporate world is irremediably addicted to its Office productivity software. That led to a flourishing corporate server and network business. From there, taking customers to Azure, their public cloud, has been surprisingly easy.

The benefits of the cloud are obvious: IT managers can scale workflows while reducing implementation costs. It's win-win. However, Microsoft managers did something really smart. They encouraged companies to keep their data on the site, in a hybrid cloud configuration.

Today it is the leading provider of hybrid cloud solutions. It's a big business, where the company has the clear advantage of familiarity.

According to Statistica research, reported in Business Inside in July, Azure is on track to reach an annual execution rate of $ 20 billion. The business has doubled over the last two years. And most importantly, with 90% growth in the most recent quarter, it is expanding almost twice as fast as AWS.

Meanwhile, Microsoft is making large investments in AI. They are not the kind of things that receive headlines. There are no robots to back out or videos of cars that drive cars, and certainly, no computer defeats humans in strategy games.

It is about investing money in functions that take advantage of Office, its dominant productivity suite.

This week, the company announced a group of new AI features. One will help Excel users to see relationships in their work by automatically creating graphics and other graphics. Another will begin to automatically detect trips, deliveries and even email triage in Outlook. And One Drive will start looking for text in the images, then it will route the data to the corresponding application.

Alone, none of these are revolutionaries. However, taken together, they are adhesive enough to keep users stuck in the Microsoft ecosystem. That is the goal. Sorta likes to encourage large corporate clients to maintain control of their data, using Microsoft's server software.

The stock price has been spectacularly boring, in the best possible way. It does not shoot much higher in good news. And it does not collapse in the general weakness of the market. Keep making new highs, consolidating and then making new highs.