Why Microsoft is The Best FAAMG Stock in 2021
- Market value: $1.7 trillion
- Dividend yield: 1.0%
- Analyst ratings: 25 Strong Buy, 7 Buy, 2 Hold, 0 Sell, 0 Strong Sell
Enterprise software giant Microsoft is one of the few trillion-dollar stocks on Wall Street, and the reason why is well-known at this point. Since CEO Satya Nadella took over in 2014, he has steered MSFT into the future with mobile-friendly and cloud-based services; the Silicon Valley icon now generates more than a third of its revenue from “commercial cloud” software. Shares have increased more than five-fold since Nadella took over as a result of this rethinking of legacy products such as Windows and Office.
What’s more, not only is its Azure segment is the second-largest cloud platform in the world behind Amazon Web Services, it’s also the fastest-growing division within MSFT itself. Consider its October earnings report, where Azure revenue growth clocked in at a staggering 48% rate! When you’re already a dominant force in enterprise technology, that kind of expansion is incredibly difficult to achieve and proves the power of Microsoft products and management.
Beyond this broader trend lifting Microsoft, MSFT could be one of the best tech stocks to buy for 2021 as its dominance in other divisions continues to pay dividends. Its Xbox content and services revenue jumped 30% in the latest quarter as stay-at-home orders have fueled massive growth in gaming. And its Surface revenue jumped 37% as consumers and businesses are in increasingly in the market for next-gen tablets to help with remote work and schooling needs.
If those growth prospects weren’t enough, Microsoft has a staggering $138 billion in cash on its books – adding unrivaled stability to ensure this stock will continue to thrive for many years to come.