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Microsoft Stock Rises Ahead Of Build Developers Conference

Microsoft ( MSFT ) shares climbed Tuesday on bullish notes from two investment banks and expectations for a news-filled Build developers conference, which starts Wednesday in San Francisco. Microsoft stock rose 2.2% to 54.71 on the stock market today . It has climbed 13.5% since hitting a five-month low of 48.19 on Feb. 8. The stock hit an all-time high of 56.85 on Dec. 29. UBS analyst Brent Thill reiterated his buy rating on Microsoft stock, with a 12-month price target of 60. Pacific Crest Securities analyst Brendan Barnicle maintained his overweight rating with a price target of 65. Thill said Microsoft’s commercial cloud business was on pace to lap the company’s targets. “Microsoft continues to execute on a balanced story, with the commercial cloud businesses (including Azure, Office 365, Dynamics) leading the charge,” he said in a research note Monday. Microsoft’s commercial cloud business ended the December quarter with an annual revenue run rate of over $9.4 billion. That’s up more than 70% year over year, with more than 350 of the Fortune 500 companies now using two or more Microsoft cloud offerings, Thill said. Microsoft Cloud Sales A Year Ahead Of Goal The business is well ahead of schedule in its efforts to reach management’s stated goal of a $20 billion run rate in the fiscal year ending June 2018, he said. Microsoft’s goal assumes a 35% compound annual growth rate. “We note that this growth has been entirely organic (with no major acquisitions boosting numbers), and that at the current pace (about 70% year-over-year growth), the company would reach this target about one year ahead of schedule,” Thill said. Cloud computing revenue has the benefit of being highly recurring and should be higher-margin over time, he said. Microsoft is going to promote its Internet cloud computing accomplishments at the three-day Build conference, as well as at the Envision IT Conference in New Orleans April 4-6. At Build, Microsoft also is expected to discuss its Windows platform and its HoloLens holographic computing system . “We expect positive updates on the Universal Windows Platform, mobile and Azure,” Barnicle said in a report Monday. “Overall, we expect fewer new-product announcements than last year, but more insight into the direction Microsoft is taking with its products.” At Google’s cloud developers conference last week, there were few indications that Microsoft was losing cloud market share to the Alphabet ( GOOGL ) company. “We spoke with systems integrators and customers at Google Cloud Platform’s Next event last week in San Francisco,” Barnicle said. “We heard that demand for Google’s cloud has increased since Diane Greene took the helm in November, but we did not hear that it is coming at Azure’s expense. “We repeatedly heard that Microsoft’s momentum remains robust among enterprises moving Microsoft workloads to the cloud.” RELATED: Microsoft Stock Gets Thumbs Up From Oppenheimer .

Facebook Stretches Video Power On Its Next Big Moneymaker

Taking a big step on its path of being a video behemoth that spurs ad revenue, Facebook ( FB ) on Tuesday boosted the power of Instagram. Users of Instagram will now be able to record videos of up to a minute, vs. its previous load of 15 seconds. The update is available just to a small group to start but that will expand to everyone in the coming months, Instagram said in a blog post. Facebook began offering advertisers on Instagram the freedom to post 60-second ads , up from 30 seconds previously, in February. Facebook derives more than 96% of its total revenue from advertising, with video ads drawing a premium price. More video is now viewed on Facebook than any other system except for the YouTube platform owned by Alphabet ( GOOGL ). Coming soon: Longer video on Instagram https://t.co/Xt3hIxnL1M — Instagram (@instagram) March 29, 2016 Facebook does not break out Instagram revenue, but analysts estimate that its sales could top $1 billion this year. Analysts have kept a close watch on Instagram as a key revenue-growth leg for the social media leader. Facebook and Instagram are the company’s two most important mobile ad platforms, company executives say. Facebook has always closely monitored user engagement and satisfaction before expanding ads. Allowing users to now post 60-second videos on Instagram should enable Facebook to closely monitor and analyze how active and engaged viewers are with longer-form video on the Instagram platform. The time that people spent watching video on Instagram has increased more than 40% in the last six months, Instagram said in a blog post announcing the video expansion. Facebook began testing ads on Instagram about three years ago. One month ago Facebook announced it now has more than 200,000 advertisers on Instagram. Facebook competes with Apple ( AAPL ), Alphabet, Microsoft ( MSFT ), Twitter ( TWTR ) and others to attract more advertisers. Instagram is one of multiple growth engines that Facebook can accelerate.They include Facebook Messenger and WhatsApp. While Instagram has more than 400 million users, WhatsApp has about 900 million users and Messenger more than 800 million. Facebook is in position to make its widely popular Messenger platform an all-in-one tool that could include a partnership or a battle with Apple and its Apple Pay system. Image provided by Shutterstock .

Facebook Messenger Becoming A Swiss Knife That Could Poke Apple

Facebook ( FB ) is in position to make its widely popular Messenger platform an all-in-one tool that could include a partnership or a battle with Apple ( AAPL ) and its Apple Pay system. An investigation by The Information found software codes inside Facebook Messenger that could enable the messaging service to handle in-store purchases, among other features. Messenger currently allows people to send cash between users. But data from Apple iOS code examined by The Information suggest Facebook could provide users the ability to pay for goods in person. Facebook has gradually increased the features in Messenger, such as live video calling or the ability to request a ride from Uber. During Facebook’s quarterly earnings conference call in January, CEO Mark Zuckerberg said newer services would include the ability to book airline tickets, as well as new payment features. But rather than proving its own payment service, Zuckerberg suggested a partnership. “We don’t view ourselves as a payments business, that’s not the type of company that we are,” Zuckerberg said on the call. “We’ll partner with everyone who does payment. We look at the stuff that Apple is doing with Apple Pay for example as a really neat innovation in the space that takes a lot of friction out of transactions as well.” He noted that small tests began about one year ago with some e-commerce services, so that people who bought goods could follow up with customer service or purchase more goods. “We started off pretty slowly, but that’s going to be some of the basis for how we look to make Messenger a business going forward,” Zuckerberg said. “And we’re happy with the initial results.” Facebook Messenger As Payments Vehicle Unclear By entering the mobile payments fray, Facebook could either partner or compete with Apple, Android Pay by Alphabet ( GOOGL ) and other services. “There is clearly the potential for Messenger to be used as a payment mechanism,” wrote Richard Windsor, an analyst at Edison Investment Research, in a research note. “This is all well and good, but the real secret to payments is not the app but the back-end and fulfillment, and how this will work is unclear.” Facebook rivals in Asia, such as WeChat from Tencent Holdings ( TCEHY ) and Alipay from Alibaba ( BABA ), already provide the ability to pay for goods through the app platform. “Although this is virgin territory for Facebook, its Asian rivals have been on this path for quite some time,” Windsor wrote. He said Facebook will face some challenging obstacles in expanding its Messenger features to new areas, but said it’s on the right track. “We see Facebook expanding into media consumption, shopping, gaming and search which will give it over 80% coverage of the Digital Life pie and market leadership,” Windsor wrote. “However, it is one thing to cover the pie and quite another to monetize it. Assuming that Facebook gets it right, it is on the way to create a thriving ecosystem that according to Edison estimates could allow it to double its revenues over the next five years or so.” Facebook stock was up 2%, near 116, in afternoon trading in the stock market today . Facebook is trading comfortably above its 50-day moving average as it works on a new base with a 117.69 buy point.