Why Is Microsoft Corporation Soaring Today?

Microsoft is leading the Dow today, based on a flurry of value-unlocking news. Here's what you need to know.

May 13, 2014 at 2:00PM
Msft Building

Microsoft (NASDAQ:MSFT) rules the Dow Jones Industrial Average (DJINDICES:^DJI) today. The stock jumped as much as 2% higher this morning before settling down to a 1% gain by midafternoon. The Dow is trading up in general, but no index peer rose above Microsoft's mark.

In this random walk down Wall Street, stocks often jump or fall 2% for no particular reason. But this time, Microsoft has a veritable flurry of reasons to rise. In some ways, Redmond is hitching a ride with Netflix (NASDAQ:NFLX) and Apple (NASDAQ:AAPL).

These are the three main reasons why Microsoft shares are rising quickly today.

Wait, what? Apple is helping Microsoft?
Yes, I pointed to Apple as a Microsoft booster. The longtime frenemies really are working together here.

Speaking at the TechEd conference yesterday, Microsoft's general manager of Office operations, Julia White, shared a juicy tidbit: The Office suite for Apple's iPad tablets has only been on the market for six weeks, but it has already notched 27 million downloads.


Microsoft CEO Satya Nadella is trying a brand new approach. Source: Microsoft.

The app itself is free to download, but is then linked to Microsoft's paid Office 365 service.

That's some impressive adoption of iPad-based Office units, indicating that the product could become a serious revenue driver for the long term. And it's also a clear sign that CEO Satya Nadella's decision to break away from Microsoft-based hardware is a good one. Redmond can keep its software core healthy without betting the farm on Surface tablets and other Windows-equipped systems.

Refreshing the mobile platform
In other news, PCWorld found evidence that Microsoft is getting ready to update its mobile platform.

Documents on Microsoft's technical support site show a three-year life cycle for Windows Phone 8.1 -- starting on June 24, 2014. This upgrade has yet to hit any retail handsets, though it was announced more than a month ago without a firm release date.

Early adopters can already install a developer version of the platform, including the new Cortana voice assistant and an updated on-screen keyboard app. But that's just a rough pre-release update, not really meant for widespread adoption. The final release will have all the spit-shine of a retail product, and the clunky developer-grade installation gives way to customer-friendly, automated upgrades.

This one's not exactly a surprise, but it's always good to see firm release dates, That's especially true when the final date is just six weeks away. And the original announcement isn't all that old, either. The Windows Phone 8.1 release shows that Microsoft still can deliver major products on a reasonable schedule.

Unlocking the Xbox One
Finally, Microsoft is preparing to unleash the true potential of its Xbox One video game console.

Starting on June 9, Microsoft will sell a new Xbox One model for just $399. That's a $50 discount from the $449 the system will cost you right now, and the Xbox will finally price-match the Sony (NYSE:SNE) PlayStation 4, dollar for dollar.

The lower price comes from excluding the Kinect sensor package. You could argue that losing Kinect removes a selling point from the Xbox One, but very few games actually depend on the motion-based controls. Short of Just Dance 2014 and Kinect Sports Rivals, which absolutely depend on motion-based controls, there's really no reason to get excited about Kinect.

This Kinect-less option should kick-start Xbox One's sales, unless Sony responds with a price cut of its own.

Moreover, the long-term cost of owning an Xbox One will drop significantly.

The console is a pretty great entertainment center, but only if you pay up for an Xbox Live Gold subscription. That service unlocks online services such as Netflix, YouTube, and Hulu. It also gives you access to the OneDrive cloud storage platform and enables the built-in Internet Explorer browser. But again, you have to pay for the privilege.

Xbox Live

Source: Microsoft.

Well, not anymore. Coming in June (again!), the Live Gold requirement will fall away from all the online entertainment products I mentioned, and many more besides. Gold will presumably still be needed for head-to-head online gaming and whatnot, but you'll be able to enjoy Netflix and YouTube without paying for it twice.

That's not just good news for Netflix, Hulu, and YouTube, but another obvious value booster for the Xbox One. And a much-needed one, at that.

The console could use a serious kick in the pants to help it catch up to the PS4's dominant sales -- and Microsoft is raising its boot to deliver it all in June.

Your cable company is scared, but you can get rich
You know cable's going away, but do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last, and when cable falters, three companies are poised to benefit. Click here for their names. Sorry, the Xbox One doesn't quite qualify Microsoft for this list -- yet.


Anders Bylund owns shares of Netflix. The Motley Fool recommends Apple and Netflix. The Motley Fool owns shares of Apple, Microsoft, and Netflix. 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." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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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