According to Bank of America, tech giant Microsoft is going to sit pretty in 2020.
The bank has named Microsoft as one of its top software picks for the new year. According to analysts, gaming, LinkedIn, and cloud computing are three areas of growth.
Microsoft’s cloud computing segment could help the company see a big run says Bank of America. The company’s cloud computing service Azure is poised to make up more than 40% of the company’s annual growth in the coming years.
“Given that Azure has still not reached scale in terms of margins, it is still a meaningful driver for gross margins long term,” the note from Bank of America analysts read.
The software giant’s revenue could continue growing more than 10% annually, the note also added.
Microsoft’s commercial cloud business may soon surpass the legacy Windows PC and server segments.
The bank has raised its price target on the tech company from $162 to $200.
Shares of Microsoft have gained over 50%.
Disclaimer: We have no position in Microsoft Corporation (NASDAQ: MSFT) and have not been compensated for this article.