Analysis of Microsoft share price

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Microsoft's stock market shares are among the best-known in the tech market and thus attract many investors due to their volatility and popularity of this company. It is therefore tempting to invest in these assets through bank stock market product placements or using an online trading platform.   

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EU wants to discipline Google, Amazon, Facebook, Apple and Microsoft (GAFAM)

18/12/2020 - 09h37

Faced with the numerous complaints against the digital giants, the European Union finally wants to be respected. Brussels has decided to adopt rules to make the GAFAMs comply with the standards.

Elements that can influence the price of this asset:

Analysis N°1

First of all, let's talk about the development and growth opportunities of this company. The Microsoft group has an extremely large amount of capital that has not been exploited as a whole. It is therefore important to keep an eye on the group's R&D investments as well as possible takeovers of companies and start-ups operating in high-tech sectors that could enable Microsoft to remain a leader in technological products and services.

Analysis N°2

The Microsoft group also intends to fully exploit its customer base. Indeed, if sales are currently stagnating, a good marketing strategy to encourage current customers to spend more could boost the company's growth. All strategies implemented in this regard will have to be studied with the greatest care because of the significant impact they can have on the price of this share.

Analysis N°3

For example, while Microsoft enjoys a strong reputation in its core areas of expertise, computers and software, it lags behind in other high-growth segments such as mobile technology. Other large companies such as Apple have seen the opportunities in this sector more quickly and have taken advantage of them. The future of Microsoft products in this area could have a significant impact on its stock market performance.

Analysis N°4

As we have seen through Microsoft's weaknesses, the prices of the products offered by the group remain relatively high compared to those of many more accessible competitors. By continuing on this path, Microsoft is depriving itself of part of the market. It is therefore interesting to check whether the company will implement a strategy to market more accessible software and products in order to regain some market share.

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General presentation of the Microsoft Company:

The Microsoft Company was created in 1975 in the United States by its founders Bill Gates and Paul Allen who are nowadays renowned as two of the great American leaders in this sector.

The Microsoft Company rapidly claimed its place in the spotlight by becoming number one worldwide in the development and commercialisation of operational systems for computers and software for PCs and servers. Following on from that, Microsoft reaped the benefits of the development of this sector by widening its activities with the creation of Windows Live.

But the success of this company has been somewhat controversial in the past as certain competitors believe that it has abused its position as market leader.

The annual turnover of the Microsoft Company reaches around 58 billion Euros and its net annual profit is around 16 billion Euros.


Major competitors of Microsoft:

The Microsoft Group remains the leader in its primary sector, computer operating systems; its Windows system is still automatically installed on the great majority of computers. However, facing constant technological development and innovation it has become necessary for the company to diversify its activities to face new forms of competition that relate to other parts of the new technology sector.

To better understand which companies may represent a threat to Microsoft in terms of market share we have listed its major competitors throughout the world of which the majority are quoted on the stock markets as you can see.


The major partners of Microsoft:

Microsoft is partnered with several different types of companies throughout the world certain of which are also quoted on the stock markets.

This is notably the case with the Schneider Electric Company with a partnership related to the development of technology aimed at optimising operations and transforming products and services for assimilation with IoT (the Internet of Things).

Another partnership signed with Thales in 2015 is related to the launch of new services enabling the encrypting of sensitive information before being sent by email or storing it in the ‘cloud’.

To conclude, Microsoft announced a partnership with Publicis with the objective of increasing the growth of online and offline data for the benefit of large companies.


Introduction and ranking of Microsoft shares:

It was in 1986 that the Microsoft company was first introduced to the stock market. Today, it is still listed on the American market Nasdaq. Since its introduction, Microsoft shares have move mainly upward, going from 24.31 dollars in a few months in 2005 before falling back to 21.92 dollars in 2006.

A period of price increases followed until December 2007, moment when it reached the level of 37.06 dollars before a new fall in 2008 due to the crisis that would pull its price down to 15.28 dollars, its lowest price in history.

Since then, Microsoft shares have gain several points and reached the price of 28.58 dollars in 2010.

The global market capitalization of this company is now more than 250 billion dollars. It should be noticed that Microsoft securities are part of the Dow Jones US index calculation.


The important stock market data you should know about Microsoft shares:

To begin trading on the Microsoft share price it is important to know the information above and data relating to the growth and activities of this group. However some basic stock market information about this company is also relevant such as the following:

Using the information we have supplied you with here you will be in a position to achieve precise analyses of the growth and movements of the Microsoft share price.


Turnover distribution of the Microsoft Company and its effect on the stock markets:

Here you can learn how the Microsoft Company generates its turnover according to its activity sectors. In fact, this company uses seven products sectors that include the following major products; Client, Servers and Tools, Information Worker, Microsoft Business Solutions, MSN, Mobile and Embedded Devices, and Home and Entertainment.

These three sectors alone generate the major part of the Microsoft Company’s turnover.

Due to the diversity of its products and services Microsoft was able to introduce its shares onto the American Nasdaq stock market on 13th March 1986. The company went on to become the second largest in the world relating to the size of its stock market capital with a value of 408.68 billion U.S. dollars in November 2014.

Since the 1st December 2004 the company has been distributing dividends to its shareholders at $3 per share, notably due to a related tax reduction of 35% to 15% at that time. That same year Microsoft therefore distributed no less than 28 billion dollars to its shareholders.


The advantages and strengths of the Microsoft share as a stock market asset:

Long bull strategies are common on Microsoft's share price, but before you launch into this type of position, you must of course make sure that this American group is able to maintain its growth in the years to come. To do this, it is essential to know the assets at your disposal. This is what we offer you here with a summary of the strengths of this value and the advantages of the Microsoft company.

Microsoft's major asset is undoubtedly its positioning on the global market. Indeed, this company is present in its sector of activity with products recognized for their high quality since about forty years. Thanks to its age and know-how, Microsoft has succeeded in winning over the general public and is now internationally recognized. The group's flagship products with computers and software are currently equipping countless households in developed countries, mainly but also in the rest of the world.

Customer loyalty is also another major asset of Microsoft. Indeed, and thanks to the very strong presence of Microsoft products in most households, the group has a loyal and very large customer base. These products also serve as a support to advertise complementary products or software developed by the company. For example, Windows operating systems always offer the latest updated version to users. Thanks to this well-established marketing system, Microsoft does not have to make much effort to promote its products and naturally renews the needs of its users.

As you may know, Microsoft ranks fifth in the world's largest companies in terms of capital value. This brings us to another undeniable advantage of this company. Indeed, the investment capacities of this group are enormous, which leaves many opportunities for innovation and research but also opportunities for takeovers that can bring a real plus to the group for its future competitiveness. This important capital also offers Microsoft the possibility of implementing a very aggressive marketing strategy that allows it to win more and more prospects.

Despite a system that does not integrate many free software, Microsoft stands out from its competitors in this area with quality products and services. In particular, it offers many options and responsive, high-quality customer support that contributes to the company's brand image.

Finally, the group's financial and economic balance sheet is a real asset to reassure and attract investors.  The objectives set are generally achieved.


The disadvantages and weaknesses of Microsoft's share as a stock market asset:

As we have just seen, the Microsoft group has many strengths to ensure its future sustainability. But before embarking on a long-term bull strategy, you must of course also know its weaknesses and the elements that may potentially hinder its development and growth in the years to come. This is precisely what we propose here with a summary of the main weaknesses of this value.

The first major defect of the Microsoft group concerns its pricing policy, often considered too high. Indeed, Microsoft must increasingly face significant competition from free and open source software that directly compete with its own. This applies, for example, to the OpenOffice suite, which has the same functions as the Microsoft Office suite but is completely free of charge. This is also the case for some operating systems such as Linux, which are available free of charge. Although Microsoft relies primarily on the quality of its products, it loses many customers and prospects as a result of this pricing policy and the situation on this point could of course worsen over time, particularly because of a decline in purchasing power in the most developed countries.

On the other hand, the Microsoft group also has many competitors in the marketing of its paid products and services. Indeed, there are more and more companies specializing in technology and IT and, whereas Microsoft used to face only one or two companies, today there are hundreds of them trying to take market share from it. Of course, it is still the giants Apple and Google that are the most shocking to this company because they are also multinationals with significant capital and therefore equally high innovation capacities.  This growing competition offers consumers more choice among the products in this range, which of course is increasingly damaging to Microsoft.

Frequently Asked Questions

What has been the recent progress of the Microsoft share price?

Since its original IPO the Microsoft share price has of course progressed enormously and thereby gained many points. However over the last few years its progress has been particularly positive. In fact over the last year alone, 2019, this share price experienced a rise of 28.31% and if we examine the movements in this asset over the last five years we can observe an overall growth of 270.27% in total.

What are the latest financial figures relating to Microsoft?

In March 2020 the stock market capital of the Microsoft Group was 1,034 billion dollars. The actual equity of this company in fact amounts to 102.33 billion dollars. The debt of the Microsoft Group at the same time amounts to 32.5 billion dollars. The group’s turnover for the 2019 financial year amounts to 125.8 billion dollars and the net profit of the group resulted in 39.2 billion dollars for the same period.

How significant are the lobbying activities of Microsoft?

Concerning the lobbying activities exercised by Microsoft in the European Union, we know that Microsoft has been registered on the Transparency Register of the European Commission for lobbying activities since 2009. Relating to these activities in the United States we also note that this group spends several million dollars each year on lobbying.

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