Sometimes investors can find stock inspiration by looking at big societal and economic trends. In this clip from "Ask Us Anything" on Motley Fool Live, recorded on March 30, Motley Fool contributor Demitri Kalogeropoulos discusses the digital transformation trend -- and one company he believes is a solid way to play it.
Demitri Kalogeropoulos: I guess one of the ways this is referred to as the digital transformation trend, the whole concept of all this business and consumer activity, particularly in the business world moving into the digital space. The economics just came out recently about the summarizing growth for 2021, spending on software and information services and was up 14% last year which was a huge spike in this massive industry as more obviously, a lot of companies moved a lot of their business online. That's helped dozens of industries, as you guys know, anything from cybersecurity to any of the subscription services. Dozens of companies have done really well because of that. But in that growth, companies are spending so much money and they plan all these IT directors in these massive companies are planning to do just about as much here in 2022. I don't see that being something that's a temporary, just one-time boost from the pandemic. Obviously, we had a lot of temporary shifting of workers away from the office into this remote work but I think we're seeing now that people are not wanting to go back to that office environment in large part so there's a lot of that. I think you can't really unring that bell once all these people gained all this extra productivity and they're working from home more. I think that trend is just going to happen and continue. One company I like, I'm sure you've heard of it on this trend is Microsoft (MSFT 3.90%).
Rick Munarriz: Microsoft, who is that? That's new to me.
Kalogeropoulos: Yeah, it's in the trillion-dollar club for sure. It's one of the bigger ones. But I tend to like these just dominant companies like this. It's the reminder, you don't have to necessarily get a tiny company nobody's heard of to get some great returns in a growing industry like this. Sales were up 20% in the most recent quarter of $51.7 billion. It's a massive amount of growth there. Operating income up 24%, is just a cash-generating machine. Microsoft obviously got enough cash to really take advantage of that and they're buying Activision Blizzard, getting into the gaming even more. I think that's a very exciting category with the metaverse stuff over the next 10 years or so, just so many opportunities for growth and Microsoft has the brand and that global reach to really capitalize on that big digital transformation trend.
