TECHNOLOGY

When it comes to Microsoft (NASDAQ:MSFT), many investors still consider it a tech dinosaur. A throwback to the dotcom days when the internet was just getting started and PC sales were going through the roof. Tech is all about growth and the perception is that Mr. Softy represents the old school. There’s is no “M” in FANG, after all.

But that really is short sighted thinking. The reality is, MSFT still has plenty of growth left in the tank. Diving head first into some of tech’s hottest trends, Microsoft has continued to churn-out real earnings growth over the last few years. Moreover, that growth has translated into some pretty great dividend generation as well.

In the end, Mr. Softy could be the best combination of growth & income in the market today. The firm is no tech dinosaur and belongs in almost every portfolio.

MSFT’s Big Win in Satya Nadella

To be honest, that tech dinosaur probably was well deserved after the dot com days. During the mid-2000’s and through the recession, Mr. Softy seemed to struggle with finding new avenues for significantly increasing its revenues and profits. Zune, anyone? But all of that changed when it hired Satya Nadella as its CEO.

Sensing the decline in Microsoft’s traditional bread-n-butter PC operating system software, Nadella moved the firm into the sky. Cloud computing has become the big draw at MSFT and it’s exceeding even Microsoft’s expectations.

While Amazon (NASDAQ:AMZN) is the dominate player in the cloud and Google’s (NASDAQ:GOOG) Cloud Platform represents new competition, MSFT is by leaps and bounds the fastest growing. The latest quarter saw Mr. Softy see a huge 97% year-over-year increase in Azure cloud services revenues. This follows other 90%+ year over year jumps. Margins continue to be tight for the segment, but MSFT’s knowledge of selling products on volume and bundling/product integration continues to pay big time benefits. It’s easy to add Azure when most things are hosted on Windows anyway