Facebook aside, More on the Microsoft Buy Case

You don’t have to be a Vista booster or be entirely happy with Microsoft’s Facebook adventures to want to own Microsoft. The company is benefiting from a product cycle, as well as from tailwinds in the business market, and neither should be denied.

There’s more to the pro-Microsoft case though. The company is also benefiting from fairly severe underownership among growth managers. Here’s Goldman Sachs on the subject this morning:

Also notable is that growth funds remain significantly underweight Microsoft despite it being one of the largest constituents of their comparable indices. Lipper Large-Cap Growth Funds (about $260 billion of equity holdings) currently hold 1.32% of their portfolio in Microsoft shares, a significant 173 basis points underweight. This underweighting has decreased from 210 basis points underweight in July. Microsoft makes up 3.05% of the Russell 1000 growth index. This combined with sentiment that is still overwhelmingly negative provides an interesting set-up into earnings.


  1. With all due respect it was obvious 12 months ago that they were in a massive new product cycle. and you yourself were championing the strong enterprise upside. To be bearish on Vista was to bearish on PCs and notebooks, it’s That simple. They told anybody who with an open mind that entertainment was going to turn profitable This Year. Others, like myself, noted the “stealth” price increase implicit in their new premium SKUs of Vista. Eric pointed out that the entire PC ecosystem was reporting booming results in the weeks before msft announced.
    And yes, there are a lot of institutions now on the wrong side of the boat who were told just today by their sales reps that Microsoft is in fact very much alive. they are in process of moving to the other side. It’s amazing that such high paid people need to be told such things but they do.

  2. Vista by _many_ accounts is a bust. a non-starter. full of BAD voodoo. Nope MS is on the way down.

  3. I think Microsoft has a lot to thank Google for. If it weren’t for Google, perhaps the “evil” tag would still be Microsoft’s privilege :-)

  4. @vanni: get off that kool-aid :) start chugging plain water. Back up your sleazy comments.

  5. While people love to hate the desktop operating system there is no alternative mature enough to replace the desktop in the next 3 years. In the interim MS has a free run with the desktop like telecoms have with landlines.
    Like all other corporations selling globally the falling US dollar has got to be helping Microsoft which reports in US dollars and sells globally.