Over the last eight years, Microsoft
Tracking very closely to the S&P 500 index, Microsoft's stock is worth about 2.5% more today than it was in early April, 2002. Even with dividends diligently reinvested -- which would have been a foreign concept to a Microsoft shareholder back then -- you'd have a mere 26% return in eight years for a 2.9% annualized return. You could have done better with a decent savings account. Meanwhile, rivals from Oracle
If you had done that comparative survey a decade ago, Google wouldn't have been on the stock market and Microsoft was coming off a 1,720% rise since 1992 -- a storied 43.7% CAGR rate. Is it time for Mr. Softy to rise again?
I mean, there is no way that a company with a $260 billion market cap will ever be able to generate the torrid growth seen by Microsoft in the 1990s, but the king of software has gone nowhere for a very long time.
Strong reports from the likes of Cisco Systems
If Windows 7 and business-grade software packages can't revive Microsoft's stalled stock, then perhaps the company can find new markets to fuel its growth. Oracle and Cisco are growing by acquisition, setting a fine example for Redmond to follow. Microsoft has over $33 billion of short-term investments in the bank and could very well go on a spending spree. It's just a matter of picking a target that wants to be bought, rather than forcing a reluctant bride to the altar. If Microsoft is serious about the Internet, perhaps it should make a pass at a dainty little networking specialist like Akamai Technologies
So if Steve Ballmer and his merry band can decide what they want to be when they grow old, I see enough untapped potential catalysts to make the stock worth buying. Just don't expect get-rich-quick returns. Apple and Google hold loads of promise and risk, and Microsoft is the low-risk, low-excitement elder statesman of tech nowadays.