It seems that Microsoft is starting to win the hearts and minds of Wall Street.
For the last ten years, The Vole’s share price has gone up and down like the Assyrian Empire and few who have invested in the company have seen any sustainable gains.
But, according to Seeking Alpha, recently there have been signs of a rally with Wall Street believing that Microsoft is about to make a killing out of Windows 8.
Over the past decade, Microsoft’s stock has had three noticeable rallies, including the current rally. The rest of the time the share price has fluctuated without momentum. The first rally was due to the release of Windows Vista in late 2006 and early 2007. Shares went up by 45 per cent until everyone worked out that Vista was a resource hogging turkey.
The next time Microsoft’s share price increased was in 2008 when the US Federal Reserve carried out a Quantitative Easing programme. Shares lost over half their value in 2008 as panic from the subprime mortgage crisis took full effect in investors’ minds. Vole’s share price rallied over 100 percent but fell back by a third.
The current rally has been by 31.6 percent and is continuing to rise and while analysts are not sure if it will continue, it is more likely to do with the halo effect of Windows 8. Microsoft’s share price began to increase seven months prior to the release of Vista.
The theory is that Microsoft’s share price will do really well throughout 2012 leading up to the release of Windows 8. If it is due to this, we can see Wall Street putting more pressure on Microsoft shares. The fact that we are uncertain of a date for Windows 8 to come out will encourage the rise further.
The real danger for Microsoft is whether or not Windows 8 will prove to be another Vista. If it does turn out to be a turkey then the company might not recover. Fortunately for Microsoft, so far, Windows 8 is receiving positive attention.