Microsoft: From Bing To The Cloud, Making All The Right Moves

Tigress Financial Partners has upgraded Microsoft Corporation MSFT from Neutral to Buy and believes management is pulling all the right strings with its strategic direction. In a new note, analyst Ivan Feinseth said the combo of improving business fundamentals and aggressive capital return is a recipe for outperformance from Microsoft.

Azure, Bing and Xbox

“We believe MSFT’s expanding cloud transition strategy including Azure, the subscription-based Office 365 model and the future integration with LinkedIn along with new initiatives in Artificial Intelligence (AI), search, gaming and other new products will begin to drive a new acceleration in Business Performance,” Feinseth explained.

He believes Microsoft Azure has closed the gap to become real competition with leading cloud services company Amazon.com, Inc. AMZN.

Feinseth noted that Bing is also gaining market share from smaller search rivals and is benefiting from partnerships with Yahoo! Inc. YHOO, HP Inc HP and Facebook Inc FB.

He noted that Microsoft’s Xbox has become much more than simply a gaming device.

“MSFT is also one of the largest publishers of video games and its Xbox console serves as a web-based household gaming and entertainment platform enabling subscribers to play multiplayer games and access non-gaming entertainment,” Feinseth wrote.

Microsoft's stock is off to a solid start so far in 2017, up 1.2 percent in the opening weeks of the year.