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Why Microsoft has been strong since Satya Nadella became CEO

Puneet Sikka

Why Microsoft has been strong since Satya Nadella became CEO (Part 1 of 5)

Satya Nadella’s short stint at Microsoft has given investors confidence

Satya Nadella was appointed CEO of Microsoft (MSFT) in February 2014. In the short span of three months, he has taken a number of initiatives that have made investors happy, as we can see from the performance of Microsoft’s stock. As the chart below shows, Microsoft’s stock has increased from $35 to $40 in the last three months. Traditionally, Microsoft’s stock hasn’t been known to show much change and was stuck at around $30 for a number of years. The introduction of an Office subscription service on Apple’s (AAPL) iPad, the launch of the Surface Pro 3 tablet, and the release of Windows Phone 8.1 are some of the achievements Nadella has made during his short stint at Microsoft. The recent run-up in Microsoft stock has helped the iShares U.S. Technology ETF (IYW) and iShares North American Tech-Software ETF (IGV), which  have decent exposure to Microsoft.

Key takeaways from Microsoft’s recent presentations

Microsoft recently attended back-to-back events—one at the 42nd Annual JPMorgan Global Technology, Media and Telecom Conference on May 20 and the other at Cowen & Company Technology, Media & Telecommunications Conference, on May 28—to talk about its business’ growth areas (namely, cloud, mobile, big data, and analytics).

The key insight that came out of these events was how Microsoft’s vision has changed to a mobile-and-cloud-first approach. Some of the trends that Microsoft talked about were its shifting focus from the on-premise market to the cloud services market, how Nokia’s (NOK) acquisition would help Microsoft become a potent mobile player, how Microsoft is growing its database business to challenge Oracle’s (ORCL) supremacy, and how it’s partnering with a number of software players to increase its presence in the cloud and mobile markets.

Continue to Part 2

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