In this segment of the Motley Fool Money podcast, host Chris Hill is joined by senior Fool analysts Jason Moser, David Kretzmann, and Jeff Fischer to discuss Microsoft's (NASDAQ:MSFT) latest quarterly results, which displayed mammoth revenue.
In the cloud, gaming, and elsewhere, the tech giant is firing on all cylinders. Well, actually, all cylinders but one -- and the Fools consider what its one big weakness means for its future.
A full transcript follows the video.
This video was recorded on April 27, 2018.
Chris Hill: Shares of Microsoft have risen more than 40% over the past year. Maybe that's why Wall Street shrugged after Microsoft's third quarter revenue came in just shy of $27 billion, Jason. And cloud continues to get it done for them.
Jason Moser: Yeah. You have to really love what Satya Nadella is doing for this business. He was such a great hire at such a pivotal time for this company. Cloud, as you mentioned, remains a big opportunity, and I think that makes sense, given the company's installed base on the enterprise side. They continue to grow the business across all three main business segments. Big opportunities in gaming. Obviously, we see Microsoft every day in some shape or form.
I think, if there's one place, one area where Microsoft is weak, and I think this is probably the only place, it's mobile. You don't see mobile really anywhere in their releases. They only mentioned the word five times in the conference call, and even those five times were essentially meaningless. That's a problem in a mobile world. So, when we talk about these companies that are growing so fast, the first company to a $1 trillion market cap, for example, it's not to say Microsoft couldn't get there, but they're going to have a really hard time if mobile is not a part of that strategy.
So, when you put them up to companies like Amazon and Alphabet, the growth rates speak for themselves. Microsoft isn't keeping anywhere close to the pace that those tech giants are, even though they're investing at that same pace. So, good quarter, good business. Just, it's a difficult, difficult space to keep any sort of sustainable competitive advantage.
Hill: Real quick, before we wrap up, since you mentioned the race to a $1 trillion market cap, we have Microsoft and Google just over $700 billion, Amazon around $735 billion. Oh, yeah, there's Apple, $820 billion. Who are you picking in this race? David?
David Kretzmann: Apple has a head start. I'll go with them.
Moser: I've been consistent with Amazon, I'm sticking with it.
Jeff Fischer: I've been inconsistent. [laughs] In the past, I've said Apple, and now I'm leaning Amazon.