27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Top tech blue chips, including Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class A (NASDAQ:GOOGL) (NASDAQ:GOOG), are locked in a fierce race to becoming the first $1-trillion company in market capitalization.
Although not a leading contender, Microsoft Corporation (NASDAQ:MSFT) has the opportunity to hit the milestone, according to Morgan Stanley.
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The Analyst
Morgan Stanley analyst Keith Weiss has an Overweight rating on the shares of Microsoft and increased the price target from $110 to $130. The stock is Morgan Stanley's top pick, the analyst said.
The Thesis
Microsoft's strong positioning for ramping public cloud adoption, large distribution channels, installed customer base and improving margins support a path toward a $1-trillion market cap and $50 billion in EBIT, Weiss said in a Monday note.
The company has differentiated its public cloud offering from competitors like Google and Amazon in the areas of core infrastructure services, "compelling" Platform-as-a-Service capabilities and the application layer, the analyst said.
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Weiss said he expects the combination of the public cloud assets with pre-existing enterprise assets to drive share gains over the next three years. Morgan Stanley projects that Microsoft will maintain a dominant position in the public cloud market, which is expected to more than double in size to over $250 billion.
Microsoft's margins are past the inflection point, and both gross and operating margins should improve over the next 72 months, Weiss said.
"Combining a durable top line growth story with improving margins drives a 17-percent CAGR for Microsoft's EBIT thru calendar 2020 to over $50 billion."
The Price Action
Microsoft shares were up about 34 percent over the past year through Friday.
In pre-market trading, the shares were adding 3.98 percent to $90.65.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.