Why is Microsoft Corporation Surging Today?

Microsoft took the lead in a general Dow Jones surge on Monday, thanks to a smart round of promotions in the C-suite.

Mar 31, 2014 at 2:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) has surged 0.8% higher in midafternoon trading Monday. But that's nothing next to Microsoft (NASDAQ:MSFT), which posted the strongest gain on the blue-chip index today.

Microsoft shares soared 2.7% as of 2 p.m. EDT as freshly appointed CEO Satya Nadella really started taking charge of the company.

Nadella is shaking things up in Redmond. In an internal email unearthed by Bloomberg this morning, Nadella appointed new leaders for three of Microsoft's most important divisions.

When the acquisition of Nokia (NYSE:NOK) closes, probably by the end or April, there's a reunion in the cards. Former Nokia CEO Stephen Elop will take charge of Microsoft's hardware division, including Nokia's handset business.


Microsoft CEO Satya Nadella, showing his muscles this week. Image source: Microsoft.

However, Elop won't take over the company's Xbox operation. Both the hardware and software sides of Xbox will run under Phil Spencer, who has commanded Microsoft's video game development since bootstrapping Microsoft Studios in 2007.

Rounding out the trio of executive upgrades, Scott Guthrie takes the reins of Redmond's cloud and enterprise group. Once again, Nadella picked a guy with plenty of relevant experience: Guthrie is spearheading the Windows Azure cloud computing platform and has been deeply involved in developer operations since creating the ASP.NET programming language way back in 2002.

Investors like this quiet management makeover for at least two important reasons:

  • Nadella is appointing his own lieutenants. In particular, Nadella has worked closely with Guthrie in the cloud computing segment for several years. Ex-CEO Steve Ballmer's spirit might not linger in Redmond after all.

  • These appointments all make sense. Nadella is putting all the right experience on top of each division. If you feared that the new CEO's makeover would change things just to prove that he had that power, it's time to breathe a sigh of relief.

Nadella's promotions are taking uncertainty out of owning Microsoft shares, and that's always a good thing. If he keeps this up, Microsoft might have a shot at staying relevant in this crazy, ever-changing market.

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Anders Bylund has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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