The tech-heavy Nasdaq stock exchange has been in a bit of a slump lately, with the index falling 13% since hitting its all-time high in February. Even market giant Microsoft (NASDAQ: MSFT) has seen its stock price drop to a 52-week low, down 8.7%. Despite this, there doesn’t seem to be a clear reason to sell Microsoft shares at the moment. In fact, Wall Street analysts are bullish on the company, especially following the announcement of a groundbreaking quantum computing chip named “Majorana 1.” This chip could potentially revolutionize the industry with its capabilities.
While Microsoft’s quantum news is exciting, the company’s core businesses – Azure and Office products – continue to perform strongly, accounting for 75% of its revenue. Azure, in particular, has experienced significant growth in the era of artificial intelligence. These high-margin segments contribute to Microsoft’s impressive operating profit margin of 49.2%.
With such a strong foundation and promising developments in quantum computing, Microsoft’s current stock price may not necessarily reflect its true value. Despite recent market fluctuations, the company’s solid fundamentals and innovative initiatives suggest that it might be a good investment opportunity.
Microsoft stock remains stable despite recent events, including President Trump’s tariffs, as the company continues to perform well with a high operating profit margin. Although risks from a trade war exist, Microsoft’s focus on electronic products minimizes the impact of tariffs compared to companies dealing with physical goods. While the stock is not the cheapest, it presents a good investment opportunity for those interested in its long-term potential. Before investing, consider other top stock picks recommended by The Motley Fool’s Stock Advisor team, who have a track record of identifying high-return opportunities. Join Stock Advisor for access to their latest top 10 list and expert guidance on building a successful portfolio.
