Last April, Longboard Asset Management released its most well-remembered presentation. The company detailed its thesis on an electric car company called Tesla Motors Inc (NASDAQ:TSLA). The company said that Tesla shorts were in for “a world of hurt.” Last April, Tesla traded for around $45 per share. Today the company trades at more than $180 per share.
Microsoft Corporation (NASDAQ:MSFT) is the new Apple Inc. (NASDAQ:AAPL), according to the company’s most recent release. There are many who will scoff at the idea that the Redmond company, long thought of as stagnant and leeching, is the next innovator or the next growth stock, but Longboard makes a good case for the idea.
ValueWalk's Raul Panganiban interviews JP Lee, Product Managers at VanEck, and discusses the video gaming industry. Q4 2020 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview With VanEck's JP Lee ValueWalk's ValueTalks ·
Microsoft and Apple’s thinking
Longboard sees Microsoft Corporation (NASDAQ:MSFT) stock trading at more than $60 in the next three years, and says that the firm’s biggest problem is “legacy perception.” On today’s market, shares in the software company sold for as low as $34.96.
Betting on Microsoft may seem like a poor decision, but the Longboard thesis is simple. Microsoft Corporation (NASDAQ:MSFT) will continue to do what it has always done best. The company is going to dominate enterprise. The keywords for Microsoft growth are, according to the report, “enterprise cloud” and “high value tools and services.”
Microsoft Corporation (NASDAQ:MSFT) dominates the enterprise world and its name is still one of the most trusted in the industry. The company isn’t associated with innovation, but it is associated with reliability. In order to achieve domination in the future, Microsoft will use hybrid Android/Windows devices, cloud computing software, and a suite of differentiated devices.
Apple failing at enterprise
Apple Inc. (NASDAQ:AAPL) has never been good at enterprise. The company lost the PC race to Microsoft in the 1980s for exactly that reason. The company has made some effort to get into the market, but it is not concentrating on it. Microsoft Corporation (NASDAQ:MSFT) may seem like it is consumer facing with the Surface tablet and the Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) acquisition, but the firm is still aimed directly at enterprise.
Microsoft Corporation (NASDAQ:MSFT) may well be the next Apple Inc. (NASDAQ:AAPL). Despite problems, the firm is still the best positioned to offer solutions to the massive enterprise market, and will leverage everything it has for a successful transformation in the coming years. Apple Inc. (NASDAQ:AAPL) shareholders should watch out.