As 2015 comes to a close, it’ll be remembered as a year full of surprises. Who thought back in April that the New York Mets would make the playoffs (along with the Chicago Cubs) and somehow make it to the World Series? While Microsoft was on pace to have a good year when 2014 was coming to a close, it was hard to imagine Redmond would gain such a high level of respect and dialog among so many longstanding critics.
If Goldman Sachs’ mea culpa last week wasn’t enough, when I picked up this week’s issue of Barron’s magazine, which is my Saturday morning ritual, I glanced at the cover and saw the headline, “The New Microsoft,” with Satya Nadella’s photo plastered on it. Usually when a company is featured on the cover of Barron’s, it’s because it has determined its stock is going to soar — or crater. In this case it was the former. Noting that since Nadella has taken over, Microsoft’s shares are up 48 percent — 67 percent if you go back to the day his predecessor Steve Ballmer announced he was “retiring,” it has emerged again as a growth company whose shares could jump another 30 percent. The article suggests, while Amazon’s AWS cloud business is Microsoft’s most significant competitor, the growth of Azure will give it a run for its money. At the same time, the author suggests Microsoft is a beneficiary of Amazon’s growth. In April, Amazon disclosed AWS’s revenues and profits for the first time, and its shares have since grown 70 percent.