FBR Increasingly Positive On Microsoft Following Windows 10 Adoption Data

• Microsoft Corporation MSFT announced on Monday morning, ahead of tech event CES 2016, that 200 million devices have adopted and are now running on Windows 10 – its latest OS, launched last July.
• After the upbeat announcement, FBR & Co. analyst Daniel H. Ives decided to reiterate an Outperform rating on the stock.

In a report issued Monday, FBR’s Daniel H. Ives reiterated an Outperform rating on Microsoft after the company announced that Windows 10 adoption had increased substantially – from 110 million devices in October to 200 million devices entering 2016.

Many analysts on Wall Street were somewhat bothered or concerned about the company’s free-upgrade strategy, arguing that the expiration-driven cycle would only provide a one-time benefit for both the company and its investors. The experts at FBR believe this remains the "only way to go," since Nadella “needs to drive mass adoption across consumers and enterprises with the underlying goals of creating a more consistent platform experience and attracting an increased number of developers/apps for its mobile offerings and devices,” the report explicated.

Related Link: Microsoft's 'Best Cloud Days Are Ahead'

The analysts are seeing “positive signs from the developer community since the launch of the new Surface/Surface Book, Lumia lineup, and hints of the Hololens/augmented reality strategy for 2016 and beyond for Windows 10 and Xbox, which could be a catalyst for the all-important developer community to further embrace Windows 10.”

As the PC supply chain continues to face enormous headwinds, it is becoming more crucial for the Windows 10 cloud approach to open up new growth paths for the management team in 2016 and beyond.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.