MSFT has had an incredible runup over the past year. We'll probably just meander around the current price range for the next 3-6 months. MSFT can then resume it's historic climb of 30-50% per year. MSFT is huge, and I admit that it will be tough to climb 50% per year from this point forward. But it's not like they're not trying.
Investments in cable infrastructure, NT 5.0, Windows 98, continuing growth in international markets, shrinking piracy rates, growth in entertainment products divisions, increasing attention to small business needs, R&D in areas that will make Windows 2000 a revolutionary product (e.g. speech recognition), 64-bit operating systems that clobber mainframe performance, more of the best development tools around (e.g. VB5), growth in more niche markets like desktop publishing and real-time animation/modeling, etc...
Microsoft is arguably the most successful company in history. There's no reason to believe that it won't continue to steer an intelligent and admirable course into the next millenium and beyond.
Is MSFT overvalued now? How much of a premium do you want to pay for a company in such a dominant position? It's all debatable.
However, I don't think it will be too many years into the future when a $180 billion market cap will look puny for Microsoft.
Joe S. |
