The Dow Jones Industrial Average (DJINDICES:^DJI) touched an all-time high of 16,845 this afternoon, marking the seventh record high this year. The European Union's decision to add more monetary stimulus to the economy and turn deposit rates slightly negative has investors cheering, even if it's really a sign of how bad conditions in Europe are.
Leading the Dow today is Microsoft (NASDAQ:MSFT), which has changed from a Dow dog to an outperformer almost overnight.
What's driving Microsoft today
The catalyst for Microsoft today was an analyst note from FBR Capital Markets' Daniel Ives, who said CEO Satya Nadella's plans to shift the company's focus toward mobile and the cloud are going well. He also raised his price target from $43 to $49.
But the bigger news was that Microsoft expects Windows 8 mobile devices to cost less than $200 by year's end. OEM partners vice president Nick Parker said in a keynote speech at Computex that Windows Phone smartphones will sell for less than $200 this year as Microsoft targets the lower end of the market. Microsoft began offering its operating system free for devices smaller than 9 inches, and it appears manufacturers are starting to take advantage.
More of Microsoft's revenue will come from cloud services and enterprise software as a result of the shift, but it's necessary for Microsoft to gain share and not allow its high-tech rivals to control the world's mobile devices.
It'll be a slow process to gain market share, but Nadella is making progress, and with shares trading at 14 times forward estimates and the stock paying a 2.8% dividend yield, there's good value to be found for investors.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.
More from The Motley Fool
Here Are My 3 Top Trades for 2018
If you're not sure what stocks to own in 2018, consider starting with these three ideas.
Microsoft Earnings: Will Strong Growth Persist?
Can strong growth in cloud services and Office 365 help revenue rise nicely in Q2?
2 Great Stocks You Can Buy and Hold Forever
Both of these stocks have positioned themselves for nearly limitless growth potential long into the future.