The tech giants are in government crosshairs thanks to a series of antitrust cases popping up this year. Investors worry it could put a damper on profits or even split the companies up.
But while the FANG stocks come under fire, analysts predict solid growth for our top tech stock.
This company’s net income grew 136% in 2019. And it’s pushing even further in the coming year. This is the perfect tech buy following the big antitrust probes announced on Sept. 9.
Fifty state attorneys general will investigate Alphabet Inc. (NASDAQ: GOOGL) for antitrust violations. Eight will look at Facebook Inc. (NASDAQ: FB).
And the Justice Department will decide whether these companies should be broken up, and how.
Sounds scary for big tech. But not so much for our pick.
The mainstream media will panic, with headlines like “Google and Facebook’s antitrust problem is getting much more serious” (The Verge).
But this is textbook “jumping the gun.” We’re far from doomsday, in fact. All we know right now is that these tech giants can expect minor losses under the public’s magnifying glass.
And we know this because there is precedent for these cases. That precedent is also why one of our favorite tech stocks has slipped by today’s antitrust radar.
The tech stock we’re talking about has survived this already. It took its losses. But it’s through the roof since then – and still climbing.
You can think of this company as FANG’s older brother. He’s paid his dues, and he just got his driver’s license. Now, he’s hitting the open road while Google and Facebook take their licks from the helicopter parents.
FANG stocks may have their growth stunted for a while. But this other tech stock is a perfect buy in the meantime.
And it’s all because it controls one vital technology…
Why This Is the Top Tech Stock Today
We don’t know what the future holds for Google and Facebook. We’re just trying to help you profit in any event.
And in this case, there’s no better safety than Microsoft Corp. (NASDAQ: MSFT).
It’s been through an antitrust fight before, but it’s avoided that since.
The company also owns Bing, the second largest search engine after Google, and LinkedIn, one of the largest social networks. These both could benefit from the shadow looming over Google and Facebook.
But because that’s only tentative, the more important profit opportunity comes from Microsoft’s Azure cloud.
This is what raised MSFT from the ashes of its own antitrust battle years ago.
The Department of Justice had MSFT on the ropes in the late 1990s. Twenty state attorneys general joined hands in suing the company.
Microsoft was accused of monopolistic behavior with its Windows PC operating system and its Office enterprise software. The company also controlled over 90% of the Internet.
A judge recommended that Windows be split from Microsoft into a separate company. But Microsoft successfully appealed this move.
After a decade of probation, MSFT was free. But it was pressured into sharing some of its programming code with outside developers.
Of course, this wasn’t profitable behavior. The stock fell 14% as the company spent the following years under further antitrust scrutiny.
MSFT virtually flatlined between then and 2014.
But since 2014, under new CEO Satya Nadella, Microsoft stock has shot up 253%.
Under Nadella, the Azure cloud has become a major income stream.
Azure has provided over $30 billion in revenue per year to Microsoft. It has 54 global data center regions around the world.
It’s the reason MSFT had a perfect 4.9 Money Morning Stock VQScore™ earlier this year. It’s down to a 3.8 right now, but after its last big surge, it still expects to add 25%.
Revenue from Azure grew 73% in the third quarter of 2019. It continues to grow with further adoptions by the business sector.
Even after blazing the antitrust trail for today’s FANG stocks, Microsoft is still the best growth stock among big tech. The stock is poised to gain 25% over the next 12 months.
For now, we don’t know how these FANG investigations will pan out. But Microsoft is a rock-solid anchor meanwhile.
— Mike Stenger
Source: Money Morning