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Yahoo Finance's Company of the Year: Microsoft

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Dan Howley explains why Microsoft is Yahoo Finance's 2021 Company of the Year.

Video Transcript


- Microsoft has had a stunning year. After nearly a half-century in business, the tech giant crashed through the $2 trillion market cap mark in June, joining an exclusive club that includes Apple, and for a brief moment, Google parent Alphabet. As of December 2, Microsoft was worth a staggering $2.5 trillion.

Over the last 52 weeks, Microsoft's stock price has skyrocketed 45%, easily outpacing the broader S&P 500, which rose 21% over that same period of time. The company's financial reports have been just as impressive as its market cap. Over the last 12 months, the software giant has reported a stunning $176 billion in revenue, a year-over-year increase of nearly 20%.

BRENT THILL: This company had some of the best growth rates we've seen in quite some time. And I think the only concern for Microsoft next year is when you're growing close to 20%, you know, can you continue that at a you multihundred billion-dollar run rate, and that's a difficult task.

- But Microsoft has always been a cash cow because it operates in the high-margin software sector. Founded by Bill Gates and Paul Allen in 1975, Microsoft's Windows would become the most widely used operating system in the world. And Gates would hold onto his CEO role for decades until he stepped aside for Steve Ballmer, who took the reins in 2000.

The duo saw Microsoft through a number of major product releases and challenges, the most significant of which was the company's antitrust battle with the Justice Department that ran until 2002. This distraction, along with a series of miscues, meant that the company spent years fighting for relevance among its big tech peers.

SCOTT SNYDER: Businesses, over time, become married to their current business models. We like to say cash cows drink their own milk. And, in this case, Microsoft had kind of harvested that. But also, they were becoming viewed as, really, a less relevant firm in the tech space because they weren't reinventing itself.

- But in 2010, the company launched Azure, a version of Windows powered by the Cloud, and it hasn't looked back. Today, under CEO Satya Nadella, the 46-year-old company is branching out and thriving in new businesses, including cloud computing, connectivity apps like Teams, and social apps like LinkedIn.

DAN ROMANOFF: I think Nadella is really one of the elite-level CEOs that I've seen in 20 years of covering stocks. Just this emphasis on Azure really worked out to be one of the best strategic decisions the company's made, probably, you know, outside of the development of Windows, obviously, and Office, that's been the key strategic decision they've made, you know, through the course of their history.

- Equally remarkable is that Microsoft has flourished while avoiding the public backlash or antitrust scrutiny its big tech counterparts Amazon, Facebook, Google, and Apple have faced. It's for those reasons and more that Yahoo Finance has named Microsoft its company of the year for 2021.

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