Microsoft could outsell Apple in the coming years

Microsoft's share value has skyrocketed in the last couple of years, touching the peak levels they last attained seventeen years ago.

Microsoft's investment in cloud computing along with its software business has attracted renewed interest from investors.

Microsoft's share price has been on an upward curve since CEO Satya Nadella decided to turn the company's attention from PCs to cloud computing, mobiles and the Xbox in 2013. Today, the company's share prices have touched $60.63, a level the company last attained in 1999. Thanks to the surge in share prices, the company has added as much as $26 billion to its market value.

This is how many Surface devices Microsoft sold in the past year

While gross profit margins from Microsoft's software sales are around 90%, those from the cloud computing business are a mere 49%. However, the business is growing faster than ever and could turn out to be Microsoft's bread and butter sometime in the future. The company is now rivalling Amazon in their quest for supremacy in the cloud computing business even though Amazon had taken an initial lead by bagging big money customers before Microsoft got serious.

During its recent earnings call for the quarter ending 30 September, Microsoft announced a net income of $4.69 billion and net revenue of $20.45 billion which are marginally better than its figures in the same quarter of last year. However, by discounting revenue deferrals to the Windows 10 operating system, Microsoft recorded a revenue of $22.33 billion and a net income of $6 billion which was around 68 cents more per share and a decent improvement over the previous year.

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It is interesting to see how Microsoft achieved this growth in the previous quarter. The sales of its PCs stagnated, sales of Windows mobile devices fell 72% and those of Xbox consoles fell 5%, yet the company managed to record an improvement over the past year, thanks to its new-found interest and heavy investments in cloud computing where the company has managed to hold on to the number two position after Amazon. With the backing of investors, it will be interesting to see if Microsoft will be able to usurp Amazon to the top spot in the new genre, even though the road ahead won't be easy.


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