Make Way for Microsoft

Microsoft(MSFT Quote) has a tough act to follow: itself.

After running up 39% since mid-June, the software giant will have to convince investors that there's room for the stock to grow.

It may be a tough sell -- in the short run, at least. With second-quarter earnings hitting the wire after Thursday's close, the consensus of the sell-side analysts who follow the stock is a target price of $32.35, not much above Wednesday's closing price of $31.09.

But give it a few quarters, say managers who hold the stock, and the picture could change. "Microsoft underperformed the market for so long, now that it's moving, it's like an oil tanker -- hard to stop," says Alan Lowenstein, a portfolio manager with American Fund Advisers. ...