- Microsoft (MSFT) is a solid stock to own this year.
- It is a defensive stock with massive growth potential.
- The gaming business could take MSFT stock to an all-time high.
Tech stocks have suffered over the past months due to the rising interest rates, investor sell off, and inflation. This has led investors towards the more conservative investments but top tech companies do not suffer for long. Evergreen and profitable company, Microsoft (NASDAQ:MSFT) is an ideal addition to your portfolio, and MSFT stock is the one to own and hold beyond 2022.
The stock is trading below $300 for the past week and is much lower than the 52-week high of $349. MSFT stock looks fairly valued currently while it is trading at $279. I believe that the company’s momentum is going to continue in the near future and the current dip in MSFT stock is a solid chance to own the top tech stock.
| MSFT | Microsoft | $279 |
Multiple Revenue Streams
The one thing to keep in mind is that Microsoft has an ecosystem that is inescapable. Right from the good-old operating system for PCs to Azure, the cloud infrastructure platform, Microsoft has an edge across all segments and could soon become one of the world’s top game publishers.
A huge reason to invest in the company is its multiple revenue streams. It has its foot in the personal computer segment, gaming, metaverse, and cloud. This means even if the revenue in one sector is down, the other sectors will make up for it. The company also enjoys success with its unique approach to innovation. Microsoft regularly upgrades and updates their products and steadfastly ensures that they do not become obsolete.
Massive Opportunity in the Gaming Segment
Microsoft already has a presence in the gaming segment and the global video game market is going to shoot past $200 billion in the coming year. This market has expanded significantly during the pandemic. It already offers the venerable Xbox console line which already has exclusive blockbuster games on it like Gears of War 5.
To make the most of this opportunity, Microsoft announced its intention to acquire Activision Blizzard (NASDAQ:ATVI) for $68.7 billion. Activision is the second largest game studio in the world and its revenue stands at $8 billion. Most importantly, it owns top gaming titles like Candy Crush, Call of Duty, and World of Warcraft. Microsoft will get these best-selling titles with millions of loyal gamers across the world.
The company is also planning to fold Activision’s product line, and entice its fans, into its monthly subscription for gamers: Games Pass.
The Bottom Line on MSFT Stock
The recent dip in the stock is not due to any factors associated with the fundamentals of the company. Microsoft is a trustworthy name in the industry and it has been around for a very long time. It is also a dividend-paying company and this dip is a good chance to buy the stock. MSFT stock looks fairly valued and it might not trade this low in the near future.
Microsoft is facing a lot of competition in the industry but the company is not the one to slow down. With the Activision acquisition and a solid user base, Microsoft is here to stay. With regular dividends, MSFT stock is a passive income generator. It has a dividend yield of 0.9% and pays $2.48 a share in annual dividends. The company has been growing revenue and earnings year over year and it boasts of solid fundamentals. MSFT stock is the one to own and hold beyond this year.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
