The first time I started diving deep into the business model behind Microsoft Corporation (NASDAQ:MSFT) was around 10 years ago, when the company’s stock price was sub $30 U.S. a share, with a yield of around 4% at the time.
A lot has changed since then, though the operating business models supporting the company’s impressive track record of earnings remain similar. Microsoft continues to provide essential services to businesses and households around the world. The thought of navigating the world without Word, Excel or PowerPoint seems like an insane idea. Microsoft products are as integrated into most of our lives as electricity or running water. We need these “utilities” to survive.
As we’ve also seen in the post-pandemic world, the ability to work from home via a cloud computing solution has become even more important than ever. This transition was already underway, and has simply been accelerated by completely unforeseen factors. This has subsequently increased the value of Microsoft’s growing cloud business.
Microsoft’s cloud business has been growing at an incredible rate in recent years and, unlike nearly every other business out there right now, I would expect to see this trend continue or potentially even accelerate over time as the shift to cloud computing technology continues. Microsoft has become the bedrock of the new technology economy and is top long-term pick for investors seeking tech exposure for this reason.
Invest wisely, my friends.