Why is Microsoft Corporation Soaring Today?

Microsoft (NASDAQ: MSFT  ) shares are soaring sky-high today. The stock jumped as much as 4.8% overnight before settling down to a still-impressive 3.8% one-day gain.

The price move adds 10 points to the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , driving the index higher while investors wait on notes from today's Federal Open Market Committee meeting. It's not the Dow's biggest points gainer, because Microsoft's roughly $40 share price makes it an afterthought in this price-weighted system.

Visa (NYSE: V  ) shares are up just 0.9% on nothing but general market buzz and Brownian motion, but Visa's triple-digit share price translates this small change into a 13-point Dow boost.

Unlike Visa, Microsoft actually has some solid news behind its single-day gain.

Newly appointed CEO Satya Nadella is taking the bull by its horns. Nadella has scheduled a press conference for March 27, and Reuters' anonymous sources say that he'll use this event to launch a brand new version of Microsoft Office designed to run on Apple (NASDAQ: AAPL  ) iPads.

Yes, this is big news.

Satya Nadella is moving markets today. Image source: Microsoft.

Apple has shipped about 145 million iPads to consumers, creating a very large computing platform that Microsoft has left untapped so far. Sure, you can use Microsoft's online Office suite on the iPad's Safari browser, but that's a far cry from selling a fully featured Office suite for Apple's tablets.

It's unclear how much Microsoft might charge for iPad-optimized Office tools, but the market reaction isn't really tied to hard numbers anyhow. Nadella unveiling an iPad-bound Office version would be more of a directional statement, demonstrating that Redmond now is open to exploring and exploiting rival platforms. To date, Microsoft has been forcing the unpopular Windows 8 and Windows RT environments on would-be mobile users with productivity needs.

So Microsoft is about to open up a brand new market. It'll be a little uncomfortable at first since Microsoft doesn't control the iPad's software environment, but then Satya Nadella is not Steve Ballmer. This is Nadella's chance to show that he's less of a control freak and more open-minded about working with the competition. If he delivers on that as-yet unspoken promise, Microsoft will carve a respectable place for itself in the post-PC era.

That's probably worth more than 10 measly Dow points in the long run, but investors are only working with a rumor at this point. That Mar h 27 press conference could unlock a much bigger gain, if Nadella plays his cards right.

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Read/Post Comments (7) | Recommend This Article (5)

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  • Report this Comment On March 18, 2014, at 2:29 PM, jdmeck wrote:

    Office and iPad? Not big news to me. Very few people need Office on their iPads. Most people can get by with the Apple versions unless you have a compatibility issue. I see this being another fail for MS.

  • Report this Comment On March 18, 2014, at 3:11 PM, factsanalyst wrote:

    I agree another failure.

    Funny how they have been announcing the release for almost two-three years. As if people actually cared at this point. If the hype hasnt happened after nearly a THOUSAND DAYS it never will; just another product to appease the gentlemens board.

    Also from statistics, the price has only fluctuated more greatly these last weeks due to the promotion campaign by gates and marketers clogging up real news. So with the promoted paid for marketing of msft these last few weeks to boast iamge on Gates, is actually turned negative and only held the stock at bay.

    Most important is the fact they have only announced development in a single area while cutting back in all other divisions. Throwing money at the cloud (ie webhosting) quadmire that has been around for decades is dilusional at best taken that majority of hosts yet to turn a profit.

    Sometime I wonder if they will ever produce a product again instead of remaking/expiring editions, reinventing the wheel on a new device, rewriting the same code to work on a different machine. Not much innovation and a waste of precious intelligent resources and minds. Glad nobody in America majors in computer science anymore, its such a waste of life.

  • Report this Comment On March 18, 2014, at 4:19 PM, RegLeCrisp wrote:

    Let me guess, both of you have iPhone and very little understanding of how business's actually work?

  • Report this Comment On March 18, 2014, at 6:34 PM, GDavenport wrote:

    Device of choice in my office? Ipad.

    Software of choice? MS Office.

  • Report this Comment On March 20, 2014, at 7:45 AM, zanzibar wrote:

    This can't last. MS is consistently making the worst decisions in their corporate history. My choice? Anything non Windows. Linux for PCs and tablets. Android for phones.

  • Report this Comment On March 20, 2014, at 1:42 PM, BillJCB wrote:

    Wall Street would appear not to agree with most the above, with the stock having risen from $28 to $40 in 12 months. Hardly the performance of a company with no prospects. The cloud of today is a very different beast from that of decades back (presume you are referring to Mainframe computing, aka CompuServe and the like). It's where everyone is heading, consumers and service providers alike. You should check your subscriptions. they must have stopped in 2008.

  • Report this Comment On March 21, 2014, at 10:16 AM, jackfleming wrote:

    Subscribe for the new service.Trends are moving towards mobile devices so traditional office users will be encouraged to use and ....

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Anders Bylund

Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.

Hypoallergenic. Contains six flavors not found in nature. Believes in coyotes and time as an abstract.

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