MSFT stock: This Competitor Has Potential
Microsoft Corporation (NASDAQ:MSFT) stock never ceases to amaze me. I thought that with the demise of the personal computer, MSFT stock would have at least taken a few steps back because of their reliance on the “Windows” platform for revenue. It seems logical, but I couldn’t have been more mistaken.
Microsoft stock is making new all-time highs and has long ago taken out its tech-bubble highs. Since the shares bottomed in 2009 after the financial crisis, MSFT stock is up 360%.
After doing some digging, I realize why MSFT stock has done so well; they have done an incredible job of diversifying their business model and, sadly now, I feel like I missed the boat on this play. Microsoft stock has a market cap of $449.0 billion. A doubling of current levels is possible, but it would be difficult to fathom. It would make Microsoft the largest company in the world by market cap.
I’m not sure if that is justifiable, but I do know that purchasing shares today won’t make me rich. If my goal is to pad my retirement account, I need an investment that has a greater potential for windfall returns. It just so happens that I stumbled upon Box Inc (NYSE:BOX) stock.
More Upside Than Microsoft Stock?
Aside from being within the same sector as—and a direct competitor of—Microsoft, Box stock has two important criteria that I look for in a prospective high-returning investment. It has a small market cap and a constructive stock chart.
Box stock has a market capitalization of $1.56 billion; when you compare this to Microsoft’s $449.0 billion, the difference is staggering. Box Inc could increase by a few multiples and still be considered a small cap company. If BOX can succeed in its business ventures, shareholders have the potential for great rewards. BOX stock has the potential that I seek from an investment.
Potential is only the first piece of the puzzle; the second and most-important aspect is a constructive stock chart. The chart below illustrates the BOX stock trend.
Chart courtesy of StockCharts.com
BOX stock was first available to the public in January 2015, and it is unfortunate for the investors who got in early because the trend has been down. The downtrend line, highlighted in blue, is created by connecting the peaks. A downtrend is defined by lower lows and confirmed by lower highs. It can easily be identified as the price moves from the upper left to the lower right. The trend is clear and defined, and is a perfect example of bearish price action.
There is good news to this chart, and it brings me great excitement to share it. The aforementioned trend line was broken to the upside on August 5. This event is very significant because is it signalling a reversal of the trend. The bear market has ended, and a new bull market has been born. The following chart illustrates the new uptrend that has developed.
Chart courtesy of StockCharts.com
Prior to the break of the downtrend, BOX stock had already begun to put in an uptrend. This is the exact opposite of a downtrend, and is a bullish chart formation. The trend also serves as a point where traders can accumulate shares or, if broken to the downside, it will signal to traders that they should exit the position. As long as BOX stock trades above this trend line, my bias will be tilted toward the bullish side.
There is some resistance at $14.50; a break above this price point will confirm and reaffirm the bullish premise.
The Bottom Line on MSFT Stock
MSFT stock was—and is still—a great investment, but it doesn’t have the potential that I seek. Box Inc is a direct competitor and should be able to capitalize as the whole tech sector progresses. The market cap is tiny in comparison, and the chart has signalled that a new uptrend has begun. There is plenty of potential to soothe my appetite, and I am eagerly awaiting bullish setup patterns.