How Microsoft beat Apple (for now) – The Wall Street Journal
DUBLIN – The story of how Microsoft has become the world's most valuable company is an interesting one. Obviously, market cap is a fairly volatile measure and the value of a company can swing dramatically in a short period of time. However, it is instructive to consider how Microsoft, once thought of as a tech industry has-been, managed to get its groove back. I think the key takeaway is that it's foolish to disregard any company that is strongly cash generative and used by many millions of people on a daily basis. Even during Microsoft's wilderness years, it generated gigantic cash flows thanks to its ubiquitous office software and it used that cash to invest in new projects and research. Eventually, that investment paid off and Microsoft developed a range of new business lines that are both profitable and cash generative. To me, this is an important lesson for Apple investors to keep in mind. Apple generates a lot of free cash flow, has huge margins, and is sitting on the world's biggest cash stockpile. It would be short-sighted to count it out just because growth in its main product line has slowed. – Felicity Duncan
By Jay Greene
(The Wall Street Journal) Microsoft Corp. tried through the years to compete in a range of buzzy consumer businesses, but it was Chief Executive Satya Nadella's focus on selling humdrum yet fast-growing computing services to companies that allowed it to reclaim the title of world's most valuable company.
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