Microsoft Corp. (MSFT) may see upside associated with its Windows 8 operating system, as many investors and the news media misunderstand the story behind this platform, says Mark Moerdler, Senior Research Analyst at Sanford C. Bernstein & Co., LLC. Moerdler has an “outperform” rating on MSFT based on the Windows 8 operating system for tablets, its potentially growing market share and its cloud offerings, among others.
“As we go forward into next year and as Windows 8 continues to show success that parts of the mindset about Windows 8 will break apart, and that will help the stock. There’s also the attach to Windows 8 on every RT device. There’s revenue to Microsoft for Word, Excel and PowerPoint. Windows 8 lowers piracy. There are a lot of attaches to the sale of that product,” Moerdler said.
Moerdler says many of the investors who entered MSFT expecting Windows 8 to fall off a cliff and were planning to sell the stock before its release have already exited the stock. He also says many of the reviewers of the Windows 8 operating system tested it in computers that were not appropriate, fueling misunderstanding of the software.
“In addition, I think we’re going to hear a lot more from Microsoft about their cloud offerings and how successful those have been. Products such as Office 365, the Dynamic CRM Online and other Dynamic Online products as well as Azure, and I think as that data comes out, and the size and the growth and the economics of it start to be given by Microsoft, that people will see that positively.”
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