One would be forgiven for thinking Microsoft just announced a $6000 computer and $1000 stand, as the company’s share price has surged 7% in the last 5 sessions according to Bloomberg, hitting its higher ever valuation in intra-day trades, and closing at above a $1 trillion valuation for the second time ever.
Over the same period, Alphabet fell 3.5% and Facebook lost 2.9%. While Apple rose 9%, this was 18.2% below their Oct. 3 2018 record high. Microsoft is now worth more than $100 billion more than their nearest rival.
As has become common, the results are speculated to be due to Microsoft’s limited involvement in the current hostile regulatory environment surrounding large tech companies and also their heavy involvement with enterprise services, which are less liable to be affected by economic downturns.
“Management noted Microsoft is better positioned than ever to maintain wallet share of customers through an economic downturn, given the broader budget exposure beyond IT,” Piper Jaffray analyst Alex J. Zukin wrote in a June 5 note. “However, they indicated they were not seeing any signs of an economic slowdown nor any weakness in the economy.”
Currently, 36 analysts have a buy rating for Microsoft with an average price target of $143 (7% up from the current close of $131.40), while one rate as hold and 2 recommend selling.
“We continue to very much have a ‘buy it and forget it’ mentality on the stock right now as the company appears to be in midst of secular fundamental growth,” Zukin wrote.