Why Microsoft Is Heading to $40

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- Lately, I have begun to wonder if software giant Microsoft ( MSFT) is still a technology company -- not because it no longer deserves the distinction, but because the market doesn't always regarded the company in the manner that it does Apple ( AAPL) or Amazon ( AMZN).

It is no secret that part of the reason has to do with the fact that not only has Microsoft traded relatively flat over the past decade, but it's a foregone conclusion that Wall Street does not care much for the company's management -- one that has done little to inspire confidence and produce the rate of growth that investors crave. Fairly or unfairly, Microsoft is more often regarded for what it isn't instead of being credited for what it is. But I have reason to think that all of this is about to change.

The Quarter That Was

On Thursday, the company demonstrated during its third-quarter earnings results just how committed it is to turning around its fortunes and, more importantly, turning around how it is perceived in that ever-pessimistic court of public opinion known as Wall Street.

To that end, I can only say that it started its opening argument in convincing fashion by having earned 60 cents per share -- topping analysts' estimates by 3 cents on sales of $17.4 billion. The company continues to benefit from a resurgence in its Office productivity applications, server software, teleconferencing units and of course its operating systems franchise.

It is no secret that its periodic OS releases for years have been the primary driver of the stock -- and this year will be no different as the highly anticipated release of Windows 8 is due to provide a considerable pop to the stock. This is not only going to benefit Microsoft, but is also expected to raise the fortunes of its struggling PC partners in Hewlett-Packard ( HPQ) and Dell ( DELL). But what investors will look for is whether or not Windows 8 will be enough to bring Microsoft back in favor with consumers. The company reported Windows division sales of $4.62 billion -- representing an increase of 4% from the period of a year ago.

If you liked this article you might like

How to Live Just Like Billionaire Warren Buffett

Crazy Weak U.S. Dollar Will Make These 10 Companies Huge Winners

Chase Hires Amazon Customer-Service Exec as Digital's Rise Reshapes Branches

Nvidia Inspires Chipmaker Gains but Rest of Tech Gets Left Behind

S&P 500 and Dow on Track for Records With Markets in Good Mood Ahead of Fed