Analyst: Sell Microsoft stock – Windows 7 sales, OS market rivals
Microsoft is one of the largest, most powerful, and best-known technology companies in the world. In fact, it held that title quite easily and without competition until Google came along. It’s also been regarded as a solid stock to hold for over a decade. But at least one analyst is now challenging that status quo.
Microsoft has had a tumultuous last few years, with Bill Gates retiring, Windows Vista failing, the Xbox 360 breaking, the Zune barely registering, and a host of other small issues all adding up. But most people think the company is turning a corner at the moment, with Steve Ballmer finding his feet, Windows 7 on its way, Project Natal coming to the Xbox, the Zune HD being announced, and those other small issues being slowly but surely dealt with.
Surely this is a great time to hold or even buy up Microsoft stock. Some would say so, but one analyst is saying the opposite. According to Tech Trader Daily, Argus Research analyst Jackson Turner yesterday downgraded his advice to investors from Buy to Sell.
Turner explained:
We believe Microsoft has misjudged — or more judiciously, has been unable to react swiftly to — the shift towards simpler operating systems on cheaper, more portable devices, including cell phones, smart phones and netbooks.
We believe that the [market] trend is not in the company’s favor and that many quarters of ebbing tide lay ahead.
In the short-term Turner maintains the software business is changing, and not in favor of Microsoft. And things are looking even trickier in the operating system sector, with a long-term threat coming from the Google Chrome OS, which will likely make its debut next year.
On top of that, Turner believes that the adoption rate of Windows 7 will be lower than most of Wall Street expects. Which would tie in with some market research but conflict with another. In effect, no one is quite sure whether Windows 7 will fly out of the door or take a while to build up, despite very impressive pre-order figures.
I’m no financial expert but Turner makes some good points as to where Microsoft could face challenges in the near and far future. However, things are looking brighter for the company now than they did a year ago. So maybe selling Microsoft stock would be a little premature.
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July 17th, 2009
There is some wisdom to this thinking. Microsoft does tend to react to markets rather than to anticipate them, particular in the past decade and a half.
I also see the “impressive preorder figures” for Windows 7 not necessarily as excitement for Windows 7 per se but as evidence that people want to upgrade out of Windows Vista ASAP. If my thinking is is right, then these sales figures doesn’t bode well for Windows 7 sales long term…
July 17th, 2009
Windows 7 will help Microsoft to a extent. But it is the economy that will end up hurting them. Which will lead people to look for less expensive or free alternatives.
Saying that, I also see Open source and free alternatives to Microsoft products like Open Office being a much bigger threat to Microsoft than Google, Linux or Apple.
July 24th, 2009
I dont think the Chrome OS will be a big hit. This is like having a laptop version of an “internet cafe” computer. Why would anyone pay anything for a computer that only has a web browser.
People want the computer to be able to do more not less!
November 24th, 2009
Looks like you guys telling the world to sell Microsoft have been wrong. With MSFT now hovering around the $30/share mark, to me at least it looks as though the bulls are winning the day.
FWIW, Windows 7 works way better than Windows XP and Vista. & Office 2010 is going to be a hit too. There are 10′s of millions of computers out there that need a new OS Windows 7 should work wonderfully for them.
JM
November 26th, 2009
Yes JM,
You are correct. This article that was posted back in July could not have been more wrong. Win7 is breaking all sales records and MS stock never looked better. If you find it posted online….it is probably worthless information. My 7 year old makes better predictions based solely on his observations (actual data).