Microsoft (MSFT) Still Shooting Blanks

December 5, 2012 1:00 PM EST
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Price: $62.70 --0%

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For the first time in a long time, Microsoft (Nasdaq: MSFT) investors had hope. The company's highly anticipated new software, Windows 8, was on the verge of launch, and with the Surface tablet they were finally back on the cutting edge of technology, or so investors thought.

In the past 30 days, shares of Microsoft have declined 11 percent, and the reason is a mystery to no one – they simply can't compete with Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG).

"For Microsoft to reverse market share losses to Apple and Android devices, it is essential that Windows 8 succeed in the market, especially in the consumer market where Microsoft's Windows franchise has been eroded by smart phones and tablets as alternatives to the ubiquitous PC," said analyst Israel Hernandez of MKM Partners.

So far, Microsoft's comeback has gotten off to a rocky start. Early reports showed declines in Windows sales, and Window's tables are being described as non-existent.

"While it is still early in the cycle and consumers may eventually come to embrace Windows 8 several quarters from now, our early conclusion is that Windows 8 has not been the expected industry catalyst that many were hoping for," concluded Hernandez.

Meanwhile, many long-time Microsoft investors and most of the recent hopefuls have voted with their feet.

MKM Partners has a Neutral rating on Microsoft (NASDAQ: MSFT) with a modified price target of $28.00 (from $32.00).

For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.

Shares of Microsoft closed at $26.37 yesterday.

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