Microsoft Corp. (MSFT) is one of the largest software companies in the world. The company’s operating systems are installed on nearly all computers anywhere in the world. Therefore, the recovery in the PC market is encouraging.
The huge core business, management’s acquisition strategy and cost reduction initiatives are driving strong cash flows and earnings growth. While we recognize that competition continues to increase and the company’s dominant position in the PC market could erode, we note that attach rates of the new OS are increasing.
We believe that Microsoft is poised to benefit from new product cycles in both the enterprise PC and server markets. Hence, we are upgrading MSFT shares to Outperform.Zacks Investment Research
