Microsoft Corporation (MSFT) Has a Huge Growth Potential: Rick Sherlund


Microsoft Corporation (NASDAQ:MSFT) announced it earnings last week and investors are positive about the company’s overall performance. Rick Sherlund, Nomura managing director thinks that it was a less good quarter, certainly not great quarter for Microsoft Corporation (NASDAQ:MSFT) because the expectations are not pretty high for the software giant. In a program on CNBC, Sherlund said that the next two quarters will be hard for the company because of the increasing competition. He said that Microsoft Corporation (NASDAQ:MSFT) is the world’s biggest Cloud vendor with around $7.2 billion revenue for the sector.

Microsoft Corporation (NASDAQ:MSFT)’s Software as a Service business is growing pretty fast. The source said that Microsoft larger portion of the Cloud business is fixated around the services business. They are clearly not as big as Amazon’s web services, but the company has a strong penetration in the Enterprise. He thinks that Microsoft Corporation (NASDAQ:MSFT)’s Cloud business is cannibalizing its core business. This is because of the fact that Microsoft’s core business relies on native software and tools. Massive Cloud migrations could deplete and damage this area for the Redmond giant.

Sherlund said that Windows business makes up around 30% of the overall business for Microsoft Corporation (NASDAQ:MSFT). But this area is experiencing a constant decline and the company knows that it will never improve because the mobile era has started. This is why Satya Nadella is heavily focusing on Cloud, mobile and services.

Microsoft Corporation (NASDAQ:MSFT) has a huge growth potential and the company’s revenue and cash flows are pretty positive.

As of 30 June 2014, Ken Fisher’s Fisher Asset Management hold around 17.7 million Microsoft Corporation (NASDAQ:MSFT) shares.

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