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Earnings were offby 2 cents, and revenue was off slightly.The stock sold off roughly 5% after the numbers were released.

When something like this happens, my inner contrarian looks to see if there is more opportunity here than real danger. And after looking at the rest of the numbers, and given the transitioning nature of big tech firms like MSFT, Intel Corporation (INTC), Apple Inc. (AAPL), International Business Machines Corp. (IBM) and others, I think there are some very bright spots in the report.

So bright, that Microsoft stockis a great value play that is oversold.

Like slowing iPhone 6 sales for APPL or weak chip demand from PCs for INTC, the fact that Windows operating systems are no longer the high-margin cash cows they once were is no surprise. It was inevitable.

Heres What Gives MSFT Its Long-Term Muscle

As consumers and businesses leave desktop computers behind in favor of laptops or mobile devices (phones and tablets), the revenue model is going to shrink in those legacy businesses.

But what makes a dog or a darling isnt an ageless product line, its being able to pivot and move into new areas that are full of growth. And that is what MSFT is doing. It has made a big push into cloud computing.

Yes, it will take some time for Microsoft to transition from Windows to its cloud business, but the numbers show that MSFT is well on its way to having a hit in the cloud.

Cloud revenue was up 8% for the quarter and its Azure division was up 120% in constant currency.

Another interesting tidbit from the earnings report was the big jump in laptop sales. Its Surface Pro and Surface 4 launched to great success; revenue was up 61% compared the year-ago quarter. That also is a bullish sign that consumers are willing to spend on high-end laptops that dont have an apple on them.

And althoughMicrosoftrecently announced it was shuttering its Project Spark, a game creation tool for Xbox users, this was certainly a niche product andits encouraging to see MSFT make the move. This is especially true, since none of those on the team were sacked; all were redeployed to other projects that need resources.

Keeping talent is a very smart move, especially in these challenging times.

Its also a bullish sign that the number of Xbox Live monthly active users was up 26% year over year. One rumor is that many of the Project Spark team were headed to techs next big thing virtual reality. Or, in Microsofts case, augmented reality.

The company has launched a development copy of the Hololens for developers people that will build apps and games for the device at a cost of $3,000. The consumer version will be far less expensive.

But this is a big gamble for MSFT because Facebook Inc (FB) has already moved into the VR space with Oculus Rift. The question will be whether people will choose VR over AR, or vice versa, long-term.

The difference between the two is that in VR, youre immersed in the world you are watching. With AR, the objects are overlaid on the room you are in, so you still see the sofa and coffee table. These are two divergent experiences and someones gamble isnt likely to pay off.

But given MSFTs powerful and popular Xbox brand and its reputation in the gaming community, the Hololens will have some solid supporters out of the gate.

Off 8% year to date, Microsoft stock is a good deal with a strong plan in place.

Richard Bands Profitable Investing advisory service helps retirement savers outperform the market without losing a minute of sleep along the way. His straightforward style and low-risk value approach has won seven Best Financial Advisory awards from the Newsletter and Electronic Publishers Foundation.

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