This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Microsoft's the Impostor, Not Amazon

NEW YORK ( TheStreet) -- We can classify two of the bigger earnings reports that hit last week as some form of surprise or spectacle.

There's Microsoft (MSFT - Get Report), which surged on an earnings beat, prompting some investors to not only buy the stock but suggest the company might not be as bad off as some of us suspect.

Then there's (AMZN - Get Report) reporting a loss on strong revenue, triggering the same old knee-jerk landslide of reaction.

The smart money doesn't question Jeff Bezos's 15-year long streak of success, while the usual suspects tell us the Amazon story rests on nothing other than hope. They consider Amazon an "impostor," yet give the nod to Microsoft, a company so confused its CEO had to announce his retirement.

No circuitous bush-beating from me: Every word I wrote last week in Apple's Plan to Destroy Microsoft and With Leadership Like This, Microsoft is Doomed still stands.

If you think Microsoft's strong balance sheet (which is nothing new) and reported strength in enterprise software means anything, relative to what Apple (AAPL - Get Report) is up to, you likely suffer from the same syndrome of denial that plagued BlackBerry (BBRY) believers when the company was still RIM.

Don't use the stock market to gauge anything. It's a chaotic, psychotic and schizophrenic place. There's no way to make sense of how it values individual companies. It prices some on the basis of confidence borne out of history, while it knocks others down on concerns over the future. It attaches a low number to some stocks because of poor past performance, but a high number to others because it expects big things tomorrow. And everything in between.

All you really need to know is that, in the aggregate, over time, the stock market continues to go up.

In other words, you can't automatically form an opinion about a company and apply it to the stock -- or vice versa -- but that doesn't mean you shouldn't invest.

If we're going to set up a Microsoft/Amazon dichotomy, as some people did last week, we need to look at the potential for continued strength in each company's core businesses.

For Amazon, that's a quick assessment. The company's e-commerce ecosystem dominates and will continue to dominate brick-and-mortar retailers who have a) shifted some sales online a decade too late and b) struggle with overhead that bears very little fruit. Amazon spends money as part of a logical growth plan, as a means to the ends of seizing massive opportunity that never seems to go away. Most other retailers do little other than follow Amazon's lead and, relatively speaking, lose in the process.

At Microsoft, however, the combination of the PC's pending death, the company's ongoing tablet-PC confusion, Apple's now-obvious decision to crush Windows/Office with consumers and in the enterprise, not to mention Google's (GOOG) emerging suite of software platforms, spells nothing other than death. The type of death most observers, particularly the ones who qualify last week's earnings as a vote of confidence, only see in their rearview mirrors.

You can read my take on what Apple's about to do to Microsoft if you haven't already. However, as usual, John Martellaro over at The Mac Observer does an equally-as-strong if-not-better job detailing the future before it happens.

That's what Bezos did in the 1990s when some of the same people pumping MSFT and dissing AMZN today were probably calling Amazon part of the dot-com bubble.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.21 -0.44%
AMZN $659.09 -1.76%
MSFT $49.94 0.14%
FB $117.80 -0.22%
GOOG $701.26 0.80%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs