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Microsoft (MSFT) Stock Down 1%, Pentagon Watchdog Clears Microsoft’s Cloud Win over Amazon

Microsoft Corporation (NASDAQ: MSFT) stock price is down by about 1.05%. Sources say that the software giant is performing better than expected as it comes into the spotlight for several reasons. The stock closed at $171.88. The fall was more modest than the S&P 500‘s loss. It fell by 2.2%. The Dow Jones lost around 1.86%, and for the tech-heavy Nasdaq index, it was 1.44% down.

Microsoft (MSFT) stock price has risen by about 18.51% in the past month alone. This is way above the industry mean of about 6.16%. It points to several strategic moves that the Redmon Washington technology giant has made over the years.

Microsoft (MSFT) earnings should come out at the end of the month. between now and then, stock prices will generally do well. 

Microsoft stock prices have outperformed the S&P 500 for at least five years-plus (+23.7% as opposed to -4.9%). The new products seem to be gaining an edge over their flagship products. This indicates a shift to adapting to the new markets and trends.

Technology companies are major gainers at this period. The modest gains have created a new paradigm for investors post-COVID-19. Microsoft’s stock prices are rising on several points.

Firstly, the Azure cloud platform is one of the cloud computing industry’s key providers. Cloud computing services have seen an exponential increase in use as more people work at home. 

The movement restrictions globally have enabled technology companies to implement cloud-based solutions. 

These solutions are behind the increase in the use of cloud services. Other components within the Microsoft ecosystem such as Github have created new opportunities. These opportunities in the technology community were obvious as the rest of the business world goes to bits. 

Microsoft has also won the JEDI contract from the U.S. Department of Defense (DoD). The cloud computing platform or “Joint Enterprise Infrastructure” project is estimated by experts to cost at least $10 billion. 

Microsoft’s win did not come without rancor from competitors. Amazon.com Inc (NASDAQ: AMZN) also bid for the DoD contract but lost out.

This came after President Donald Trump voiced his feelings about Amazon winning the contract. There were rumors at the time that Amazon had won. 

Amazon didn’t like the situation and has filed a lawsuit about the issue. The suit accuses the US President of interference in the contract process. It also goes further to allege that President Trump views its CEO Jeff Bezos as a political enemy. Bezos also owns the Washington Post. The newspaper has been critical of the Trump administration in recent times. 

Microsoft has viewed the situation differently. It said yesterday in a blog post that Amazon bid higher and lost on an even basis. According to the blog post:

 “It may seem arcane and procedural, but the back-and-forth arguments between Amazon and the government raise a key question of principle and fairness that should matter to us all. Namely, should a company—like Amazon—that bid high and lost, now get a do-over, especially now—as the IG’s report makes clear—Amazon received additional proprietary information about Microsoft’s bid that it should never have had. That’s what Amazon wants. The government rightly says no”. 

The DoD Inspector-General has cleared Microsoft’s win. It said in its report (over 300 pages long):

 “We believe the evidence we received showed that the DoD personnel who evaluated the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House.” 

The Inspector Generals’ office indicated that it was limited by Executive Communications privilege. This privilege had to do with communications between the Pentagon Officials and the Whithouse.

While Bezos and Trump may have their issues, pundits expect that things will return to normal as Business and War are more or less the same.

Microsoft (MSFT) Stock Down 1%, Pentagon Watchdog Clears Microsoft’s Cloud Win over Amazon

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