Microsoft ‘might be the best tech stock in this market’

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Demand for cloud computing services has spiked during the coronavirus outbreak and Microsoft has been a “huge beneficiary from the lockdowns,” CNBC’s Jim Cramer said Monday.

“Microsoft’s stock is a buy. Of course, I’d like it to come down after this gigantic rally, but Microsoft it might be the best tech stock in this market,” the “Mad Money” host said.

Since reaching a low of $132.52 during Wall Street’s slide into a bear market, shares of Microsoft have rallied more than 20% to $160.23 as of Monday’s close.

On Saturday, the software behemoth’s Azure cloud business revealed that cloud usage spiked triple digits on a weekly basis in communities under stay-at-home and social distancing mandates. Cloud services demand soared 775% in those areas, the company said in a blog post. Elsewhere, Microsoft Teams saw a “very significant spike” in usage. About 44 million users logging more than 900 million meeting and calling minutes in each of those days on the collaboration platform.

Windows Virtual Desktop and Power BI traffic usage were also up. The data was released amid the exodus of employees from offices and students from classrooms to remote work and learning environments in efforts to help slow the spread of COVID-19.

“The coronavirus has created a magnificent bull market in cloud computing,” Cramer said. “These [Microsoft] numbers are astounding.”

Still, Microsoft is not clear of the impact of the fast-spreading virus on the broader economy. The software company, along with other big technology names, are prone to headwinds in a global economy that’s been knocked off base. As nonessential businesses across the country have been forced to close, unemployment claims are up significantly with millions out of work.

As many as 47 million people could lose their jobs, sending the unemployment rate in the United States soaring to 32.1%, according to projections offered Monday by the St. Louis Federal Reserve. About 67 million Americans are believed to be working in jobs that are most at risk of being cut.

“I’m expecting a major worldwide slowdown, so there’s a real possibility that Microsoft’s booming cloud business could get cut back as millions are laid off,” the host said, though he thinks tailwinds remain.

“I think the rapid-fire adoption of Microsoft’s cloud platform overrides these macro concerns.”

Disclosure: Cramer’s charitable trust owns shares of Microsoft.

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