Microsoft’s cloud computing growth is likely to boost the software giant’s growth by 2020, according to Bank of The Bank of China. Analysts at BofA have named Microsoft one of the most popular software companies in 2020, raising its target price to $200 from $162. The new target price is 27.7 per cent higher than the pre-Christmas closing price.
Microsoft has several key growth drivers, including Gaming and LinkedIn, according to BofA’s notes to customers, and cloud computing service Azure is expected to account for more than 40 percent of the company’s annual growth rate over the next few years.
Microsoft’s revenue is likely to continue to grow at 10 percent a year, and its commercial cloud business could soon outpace traditional Windows PCs and servers, the report said.
Microsoft’s shares outperformed the broader market in 2019, rising more than 50 percent, while the S.P. 500 rose nearly 29 percent over the same period.
Microsoft shares were up 0.52 percent at $158.2.
The rise of artificial intelligence and companies that could re-emerge after acquisitions are key themes for the software industry in 2020, BofA said. The bank’s other preferred stocks include Adobe and Salesforce.