Amazon (NASDAQ: AMZN) just joined the trillion dollar valuation club again after months of flirting with it.
On Monday, the e-commerce giant closed with a market cap of $1.021 trillion on the heels of delivering a robust set of Q4 results, making Amazon only the fourth U.S. stock to close with this valuation.
Just after Amazon hit that elusive valuation level, Jeff Bezos sold 905,456 of his shares for more than $1.8 billion so he could fund his rocket startup, Blue Origin.
But despite all the buzz around Amazon, one expert trader says another member of the trillion-dollar club is the one to watch now.
“I personally love Microsoft,” said Danielle Shay, trader specialist at Simpler Trading. “I think it’s one of the best long-term investments out there.”
Microsoft shares are up nearly 68% over the last year and have already gained 14% so far in 2020 and there are reasons to be the stock will continue higher, according to Shay.
“You have CEO Satya Nadella who has basically changed the landscape of the company,” Shay noted. “Microsoft is now a cloud computing powerhouse. They just got the JEDI contract from the [Department of Defense] last year – that was a huge win, especially over Amazon. And they’ve shown consistent quarter-over-quarter and year-over-year growth.”
Blue Line Capital’s Bill Baruch is bullish on Microsoft as well.
“On a technical basis, I’m leaning on Microsoft as well,” Baruch said. “It’s hard to choose from these bellwethers but I use the process of elimination. Apple has hit my $324 upside target. Amazon $2,000 is too fresh – I want to see some consistent closes above $2,000.”
But according to Baruch, there are two support levels that could cushion Microsoft should the market see more downside, and could lead to a breakout for the stock.
“For Microsoft, we have a strong support about [6.6%] away at $168, it’s a breakout level. I think there is good support there. And then below there, you have great support [9.4%] away at $163,” Baruch added. “I’m leaning on Microsoft as a buy here.”
Analysts rate the stock a Strong Buy and the average price target indicates 9.4% upside for Microsoft shares over the next twelve months.
Following its strong fiscal Q2 results from last week, Bernstein analyst Mark Moerdler reaffirmed his Outperform rating for Microsoft shares and raised his price target on the stock form $174 to $203 – nearly 13% higher than the price as of this writing.
“This was again another strong quarter for Microsoft continues to deliver Commercial Cloud growth as well as growth in numbers other areas,” Moerdler wrote in a note. “The cloud story continues to be very strong… probably surprising many investors.”