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Why is Microsoft Stock so Cheap?

The biggest opportunity is running in the background.

Andrew Willis 30 September, 2022 | 4:28AM
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Andrew Willis: When was the last time you physically bought software? Or even “owned” a program?... Software’s a service now. And Microsoft (MSFT) has become one of the main providers, alongside the likes of Salesforce and Workday…

With Microsoft, however, the layers of software have accumulated so much that it has also become an Infrastructure (IaaS)- and Platform (PaaS)- “as a Service” – which also puts the company among an elite few including AWS and Google.

Microsoft’s switch to a subscription business initially resulted in some slower revenue growth, but when looking at the cloud-based backbone for the system, we can see it’s starting to pay off. After growing 45% in fiscal 2022, senior equity analyst Dan Romanoff says “Azure” is the centrepiece of the new Microsoft.

From Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Microsoft Corp241.76 USD-2.32Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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