Buy Microsoft Corporation Stock for This Unlikeliest of Reasons

MSFT's devices business is in better shape than most realize

Microsoft stock

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Over the past year, I’ve written some articles discussing why I think Microsoft Corporation (NASDAQ:MSFT) is an excellent business. More importantly, I’ve presented many reasons why MSFT stock is a good buy. 

Most of the subject matter has been the traditional investment analysis investors are used to reading at InvestorPlace. However, in this article, I’m going to provide an unlikely reason to consider MSFT stock.

When you’re done reading, not only will you consider buying Microsoft stock, but you just might purchase one of its products as well.

Microsoft/Apple Loyalties Lie Deep

Anytime someone in the media compares Microsoft to Apple Inc. (NASDAQ:AAPL), whether it be MSFT stock to AAPL stock or a particular product category such as laptops, there are bound to be vocal supporters on both sides of the argument.

The Microsoft/Apple dichotomy is almost as old as time itself.

Last August, I wrote an article discussing the pros and cons of Microsoft exiting the devices market, which includes the company’s Surface line of laptop computers.

I argued that the company was wise to sell its devices business because any negative publicity from Consumer Reports regarding the reliability of the company’s portable devices — which I estimated accounted for less than 5% of Microsoft’s Q4 2017 revenue of $23.3 billion — would be a direct hit to the MSFT stock price.

Well, that hasn’t happened. MSFT stock is up 25% since the Aug. 30 publication date.

I was wrong about the effect Consumer Reports would have on the MSFT stock price, but despite my misgivings about the devices business, I was and still am on board when it comes to Microsoft’s overall direction.

A Personal Story

I own an iPhone (albeit an old 5s), a mini iPad and 21-inch iMac. None are late-model editions, but all work reasonably well.

However, I’m in the process of moving from Toronto to Halifax, Nova Scotia. When I get there, I’m going to need something better than my mini iPad to do my writing until our movers arrive with my desktop.

Up until now, I’ve always managed to get along without a laptop, doing very little work outside my home. In a new town, I’ll want to get out a little more, so having a portable device makes sense.

My first instinct was to go Apple all the way, but then I remembered the email I received from an avid Surface Pro fan after saying bad things about its reliability in my August article.

“I was really shocked by your reference to one Consumer Reports article citing issues with that line of computers from MSFT,” wrote the fan. “Have you used one? I have owned one for 2+ years now (including an upgrade last year to the Surface Pro 4) and simply think it is the best hybrid laptop/tablet out there. Unbelievably fast and reliable with great features.”

Hmm. Maybe I should take a look.

The Surface Book 2

Business Insider contributor Edoardo Maggio recently compared his 2013 MacBook Pro to a 13.5-inch Surface Book 2. The author was impressed with the performance of the Microsoft product.

“I liked using the Surface Book 2 a lot, and am genuinely excited about the development of Windows 10,” Maggio wrote Jan. 23. “It’s a great operating system, and the Book 2 is possibly its best incarnation as of yet.”

Despite his words of praise, I got the distinct impression he wasn’t entirely sold, which is how I feel about both companies’ products. I don’t love my Apple devices, but Microsoft’s never given me a reason to jump ship — until now.

What’s This Got to Do With MSFT Stock?

The point is that although the cloud and artificial intelligence are on the front burner at the moment at Microsoft HQ, and are a big part of the company’s revenue growth, its laptop business is still very relevant to consumers.

And while I ultimately might not buy a Surface Pro to meet my portability needs, it tells me that investors considering MSFT stock can rest easy knowing that its devices business is in better shape than most realize.

As someone who’s not a techie, I won’t tell you which laptop to buy. But as a “stock whisperer” — InvestorPlace contributor Josh Enomoto kindly gave me that moniker in his November article about Under Armour Inc (NYSE:UAA) — I can recommend you buy Microsoft stock.

If only for this unlikeliest of reasons.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2018/01/buy-microsoft-stock-for-this-unlikeliest-of-reasons/.

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