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Goldman Sachs drops Microsoft stock rating from Neutral to Sell

Microsoft

Finance behemoth Goldman Sachs has downgraded the rating of Microsoft's stock from Neutral to Sell in a report that went out to investors this morning. The rating change was based on what analyst Heather Bellini sees a downward trend for Microsoft's PC-based business and dwindling demand for those products.

“The company faces critical secular challenges given the deteriorating PC demand backdrop,” Bellini wrote. Financial results will “gradually deteriorate unless Microsoft successfully repositions itself as a more meaningful participant in the new era of consumer compute.”

Bellini isn't the only analyst to recommend dumping Microsoft stock. Rick Sherlund, of Nomura Holdings Inc., and Stephen Turner, of Hilliard Lyons, both downgraded Microsoft from Buy to Neutral. The result has been nearly a 5% drop in stock value so far today.

Weak business demand for Redmond's Windows 8 and a recent, slightly-misleading IDC report showing a 14% drop in PC shipments in the last year are surely to blame here. Not to mention overall disappointing sales of the Microsoft Surface tablet.

Though, admittedly, PC sales, especially in the corporate world, are Microsoft's bread and butter, Bellini's analysis seems to omit the slow and steady growth of Windows Phone 8. Even more importantly, is Microsoft's dominance in the gaming world with Xbox, which is slated to release its next-generation console in the near future.

Sure, consumer computing has changed in the past few years, but Microsoft is clearly aware of that. The real question is, can they ramp up and change fast enough to stay in the race for relevance? There are no signs of them slowing down just yet, so you may want to move your cursor away from the sell button for the time being.

Of course, if I really knew that much about the stock market, I probably wouldn't be typing this article right now.

Source: Bloomberg

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Comments

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inteller says:

no this is great. Just like when all the tools downgraded Nokia down to $1.75. I'll buy. Goldman Sachs are prolific stock manipulators, 3/4 of people never even see this "analysis" they use to base their downgrades. I'm sure GS is accumulating right now or will be in the near future.

mikewp says:

bingo. lol.. feel sorry for the ignorant investor that listens to these bozos. Right before the ER..wow..pretty transparent. Nokia hasn't pre-announced so that tell you one of two things. 1. They probably didn't significantly beat guidance and 2. (and more importantly) They are not performing below guidance.
Inteller, you can check out the NASDAQ site and the SEC site and that will tell you that GS has indeed been accumulating. Check again in a month and a half and see of their guidance matches up with their actions.

Eddie_Lomax says:

Yep, when Goldman Sachs say "buy", its either a no brainer (like Apple when the iphone really ramped up), or its time to sell, same logic for sell.
They never did get brought to account for that scheme they ran where they were creating some sort of investment vehicle and selling it, while in the same building another office was busy shorting the same investment vehicle....
Right now Microsofts profits are not plunging at 18% so its not a "no brainer" on their stocks, so this is either Goldman building up a healthy position in Microsoft for the rebound, or they just fundementally do not understand the market.  By not understanding the market the best example is the Lumia 920 launch, these geniuses pushed Nokia's stock down by 8% on the same day they launched a phone that was a certifiable hit and arguably has fired up the whole WP8 ecosystem.

Cleavitt76 says:

This is nothing.  It's just another bunch of financial crooks...I mean analysts... making a guess about whether Microsoft's profits will go up a few percent or down a few percent in the near future.  It has nothing to do with long term and they could change the forcast to "buy" next month after everyone overreacts and oversells MS stock.  There are plenty of other analyst firms screaming "buy" for MS stock right now so it's not like there is any consensus.  Also, many of these analysts are the same people that told everyone to buy Apple last summer right before it dropped to about 60% of it's peak value.
 
Last financial quarter Microsoft had a record setting quarter.  Unlike some other tech companies, Microsoft is highly diversified.  Mobile is about the only major area of their business that they are not dominating, but because everyone is so focused on mobile right now (it's still new, exciting, and growing rapidly) they only notice that one area where MS is currently behind and ignore all of the areas where MS is incredibly successful. 
 
Microsoft's quarterly financial report is scheduled for release this time next week.  I put way more value on the actual numbers than the guesses made by a company (Goldman Sachs) that almost bankrupted itself due to curruption and borderline illegal activity just a few years ago. 

SMMinke says:

Very well-said!

blackprince says:

Took the words right out of my mouth.

MrA2Z says:

Absolutely right

erzhik says:

If you are in a market to buy some shares, this is great news. Especially considering that the price will rebound once Xbox is announced.

Whodaboss says:

Now you're talking!  But I think this is just a way to send people to buy more Apple stock.  IMO.

lshepTX says:

You're right.  I'm out.  MS is dead.  I've already formatted my Windows 8 system, tossed out my Nokia 920, and my Windows 7 Media Center.  The intelligencia ALWAYS knows what's right.
I'm going to go out and buy a new Apple laptop ($1500), iPhone 5 ($200), and AppleTV ($100).  Then, I'll buy some hipster glasses, tight jeans, and act like everyone else.

BAMtech11 says:

How much did Google pay these people to downgrade Microsoft??? Hehehe

sayonical says:

Well Microsoft has its work cut out for them. They need to stem the tide of public opinion about Windows 8 quickly. Vista was much maligned and Windows 8 is in danger of a similar fate.

inteller says:

the opinion on Windows 8 is completely and maliciously fabricated by the media.  The media WANTS Windows 8 to be Vista.  They are drawing on history and mythos to fabricate this opinion.  Microsoft simply needs to bust all the myths by releasing Windows 8.1.  Literally, that will get people to buy it who never looked at it before because they bought into all the myths and lies.

ChrisLynch says:

I completely agree.

astroXP says:

I couldn't agree more!!!

Cleavitt76 says:

That would actually be pretty funny.  MS should just publish a "Service Pack 1" update that does absolutely nothing and see how many people jump on board.  I know a lot of people that are of the mindset that a MS OS can't be good until SP1 is released.  There are just as many people that believe that "every odd or even version of Windows sucks."  Both groups try to explain some trend by re-writing history, but the truth is there isn't one. 

Aaron M says:

Windows 8 has its flaws, for sure.  But yeah, the media pretty much decided Windows 8 was Vista before the first beta even came out.  For some reason they are dedicated to the fake notion that Windows is on a unbreakable stud/dud/stud/dud pattern.

inteller says:

they only "flaws" is crapbox manufacturers like HP putting it on hardware it was not meant for, JUST LIKE VISTA.  Microsoft should require touch enabled computers to license WIndows 8.

SocalBrian says:

I disagree. A lot of the early reviews seemed to me to be pretty positive - just look at places like PC Mag and CNET where reviews were typically on the order of 4 out of 5 stars. The negative has built up since the release as manufacturers reported slower slaes than expected and market research with customers showed little interest. This negativity seems to me to have grown organically, with lots of differnet ways of meassiurring it all leading to the same conclusion.

peterfares says:

Well Vista itself wasn't a dud. It's launch was horrible but if you put it on decent hardware it ran fine. The problem was they were putting it on vastly inadequate hardware.

inteller says:

Just like HP and other crapbox makers are doing with 8. 8 on a non touch screen computer is crap!

Spicymikey says:

Windows8 is great for a phone and a tablet, I love it. But its a disaster for the desktop business world.  It's a step back in productivity.  I've been saying this from the beginning, MS needs to  bring back the start button and menu system like yesterday!  A hotfix should be provided and an apology for being so stupid.  if they don't the business world will avoide W8 like the plague.   God, what were they thinking. 

deloa84 says:

I don't see why it would be a step back in productivity... I mean I get done with things faster such as checking email, sharing files and other content quickly, and the new start screen can be customized to display whatever info you deem important and you can switch back to desktop look when you're running x64/86 software in a breeze. Bringing back the start screen just seems sort of redundant now and no reason to hold on to the past. I mean Mac never had a start button and I never hear them complain about it. I will have to agree to some extent a better menu system is needed.

Spicymikey says:

For home use when you can fit everything you need neatly on the screen with Live tiles (maybe a couple screen) then it's fine.  Maybe it's ok for a secretary.  But what if you are an engineer (or a software developer for that matter).  You have hundreds of apps.  So many you can't even remember their name sometimes.  Things you only access a few times a year!  The "power user".   You need a drill down menu OR at least a drill-in tile scheme like hubs.  This  never ending and scrolling touch screen tile concept is no good for many.
Eventhough you can use a mouse, it's optimized for touch. 
 

spaulagain says:

@SpicyMikey
Um, there is one. On the Start Screen, right mouse click, then click the "All Apps" icon. Its just as fast as the All Programs menu system in the classic Start Menu
People need to stop freaking out. Take 5 seconds to learn the changes and you will find the OS actually quite effective and efficient. I'm a web designer and while I don't have 100 apps, I use around 30 total. Also, I just pin my desktop design related apps to the task bar like I did in Windows 7. Voila, they're accessible without going to the Start Screen.
This stuff isn't rocket science.

jmagwp says:

Windows Key. + Q, type a couple letters of app name, enter, it opens. In Windows 8 you could have a completely empty Start Screen and get to every one of your apps with just a few keystrokes.

If you spend all of your time in desktop, what's there to complain about the Start Screen?

What I have gathered from all the complaining about a Screen instead of a Menu is that there are a lot of "tech" people out there that should probably be in a different profession because my experience with Windows 8 (I am in finance, do some app development, and photog hobbyist) has been nothing but positive.

Spicymikey says:

A significant number of people can't spell. Another significant number have terrible recall. Nothing is good for everyone. I'm just saying they took away the start button without thinking this through. Its created a negative buzz for no reason.

RyanAMG says:

Sounds like folders are needed not a start button. And if you really can't go without it some company's have made a start button for W8. Problem solved :)

Spicymikey says:

Yes we use Start8.  Problem solved.  But people are hearing that the start button is gone, that you "need" a touch screen to use Win8, blah blah blah, and many are avoiding it.  I have abou 5000 customers around the country.  I'd say about 20 have converted to Win8 since it came out.  In contrast, about 200 have upgraded or bought new PC's with Win7 in the same timeframe (Dell, etc. still seel it configured that way).
 
It's just not being embraced.  Part of it is the product, part is the marketing.  No focus on business yet from what I see.  Just college kids and dancing girls.  They need to win the consumer market.  I get it.  But they need to do both really

RyanAMG says:

I'm a IT consultant and my customers love W8 so it sounds like your not doing your job if they aren't taking to it ;)

Spicymikey says:

Good to hear.  Sounds like you are an exception given my experiences and the dropping sales.
 
I don't sell Windows.  We manufacturer, sell, and support management software that runs on Windows.  Our product is certified for WinXP through Win8.  We don't care what they use.  Just giving my observations from feedback with the customer. 
Also, think about this. If it was so great, why is Dell still selling WIn7 so much.  it's like Vista all over again where people demanded XP way after Vista came out.
So don't fire back insults.  Speak intelligently with facts and sound arguments.  We all might learn something then.

RyanAMG says:

Dell sold XP way after W7 came out. I know because I was buying it. I work with a lot of property management Co. And a lot of that software wouldn't run on W7 without upgrading and that cost was over $100k for some clients. The problem with sales is you have kids that don't know jack S*** about W8 working at Best Buy and stores like it and they make people afraid. I was picking up a Surface Pro over the weekend and the kid told a family you don't W8 its crazy different and hard to learn. I walked over and in two min. The mom who didn't speak English was using like a champ. I asked the kid what do you use for a computer he said I only have a iPhone. This is the problem no proper training at retail stores.

procen says:

Ha ha ha that's funny the guy who is selling computers and claimed that Windows 8 is crap is only capable of using iphone. That's very inteligent of him, and I wonder if the guy even finished high school.

Spicymikey says:

Most of these guys were working at McDonald's last week.  That's true with a lot of these IT "Tech's" who feed advise to many small businesses.  Geek Squad type companies.  Again, more of what is wrong with MS strategy. 
I guess they can't walk and chew gum at the same time.  but the need to start marketing to business as well as all these commercials (which are great by the way) to promote to the tween and teen crowd.  Girls dancing in Catholic school uniforms are going to get teen boys to buy a surface, but a 40 something business owner needs a bit more :)

Spicymikey says:

I think they sold it UP TO when Win7 came out or a bit after that.  Not too much longer.  People still buy XP somehow on the "black" market.  Crazy because its been dead and buried for 2 years as far as MS is concerned.  SQl Server 2012 and Office 2013 won't even run on it. 
So you see what MS is up against then.  That's what I'm saying. 

Spicymikey says:

I'd also like to see some sort of drillable tiles.  Like the hubs on WP8.  But expanded to be user definable and configurable.  Do that on both WP8 and on W8 and you got a winner

R_j_W says:

I would like to see them have some kind of Start Bar at the bottom that has more information in so that it becomes seeless with the Metro Style Start Screen. 

ChrisLynch says:

I've said it before, and I'll say it again; Windows 8 Start Screen is the new Office 2010 Ribbon.  If you don't remember that uproar, go look for all of the people who said "gawd offul! Plz rid ribbonz."  Yeah, there were a TON of people who hated the new Office Ribbon.  Now, the majroity love it.  Sure, there are folks stuck in the ways of old, but things progress.  I disagree that the Windows 8 Start Screen is stepping backwards.

Spicymikey says:

This is not the Ribbon. That was the same thing packaged differently. If people couldn't get used to that they are just to old to handle change. This is REAL. This is a productivity issue for people who cannot use the metro side since everything they run needs a desktop and a window.

blackprince says:

So you can't type the name of the app you are looking for from the start screen which is lightning quick to get to and from on the desktop. In fact if you move your mouse to the area where the start button was you get the start screen. I have heard this argument from another "power user" software type and his was just as weak as yours. So ingrained in your ways that you are insulted when MSFT changes things.

Spicymikey says:

Again, you guys are missing the point.  I'm all in.  Had WIn8 running on my machines in the office when it was still beta.  Own a W8 Nokia 920.  A W8 tablet.  I'm not talking about ME only.  I'm speaking generally about what I see and have heard from others.  There is a flaw here.  A weakness.  Don't bury your head and pretend it doesn't exist.  Embrace it and fix it!  Make it better! 

ChrisLynch says:

And have I said Windows 8 is perfect?  Nope.  In fact, I have played with the leaked Windows Blue build, and I like where it's going.  Can't wait until an RC is released to load up on my Surface Pro.  Now only if Belfiore would comment on the Windows Phone Enthusiest program he promised was coming with WP8.

ChrisLynch says:

Metro apps aside (which I will agree with you they are a new paradigm for Microsoft's main OS), I contend that it is a very similar situation.  The Office Ribbon, and eventually Office Backstage, were both heavily criticized by all, consumers and enterprise users.

Darkness690 says:

This is not a productivity issue because the start screen is the start menu packaged differently. Most people use the start menu to launch applications, you can still do that. You can still search for applications and you can search through all of your applications if you don't know the name of it. I use Windows 7 all day at work, but use Windows 8 at home. There is no loss in productivity.

WPFanboy says:

totally agree! W8 is their biggest mistake! they should just pretend like it never happened and just keep updating win7! 

Spicymikey says:

don't need to pretend it never happened.  Just make this productive for both world.  I spend 95% of my day on the desktop using Visual Studio and Outlook and Office Word, etc.  None of that works in the metro side, yet I have not start button and menu.  WTF!  Luckily there are lots of companies that have stepped up and made it an add on feature to use.  Start8 is a good one I use.
 

spaulagain says:

No you don't! Pin your apps to the Task bar just like Windows 7. I have Visual Studio, Komodo Edit, Snipping Tool, FileZilla, Illustrator, PhotoShop, InDesign, Word, and Excel pinned to my Task Bar. I almost never leave the desktop. Also, when you hit the Start Screen, you aren't leaving the Desktop, its just the old menu expanded full screen.

Seriously, you need to take a few minutes and learn the basics instead of wasting time complaining about it on here.

Spicymikey says:

My friend, I develop Windows software for a living.  I have 5000 customers around the country.  I am a Silver Microsoft Ceritifed Partner with two certified Competencies.  I know every crack and crevis of WIn8, and every varation of their desktop and server products.   I am not ignorant to what you are suggesting.  Im just speaking generally and for everyone else I hear complaining.  Sorry you don't get that.  Just relax.  I love Windows too and work every day to help them grow the product

Bee Mon says:

Well then there shouldn't be any problem for you to create a Windows 8 version of your application. Then your users no longer has to rely on the desktop.

Spicymikey says:

Wish it was that easy.  That's a whole other issue for software developers.  I'm not talking about me and my problems.  I'm talking about Microsofts problems and ways to fix the negative press and resistence for people to upgrade.
 
As far as our applications; there are about 7 in a suite of products.  They are business apps geared towards analytics and productivity.  They do things like accounts receivable and customer tracking.  they even do perimiters security for the building and interface with hardware that uses biometric scanners.  They work with third parties to process credit card payments etc.  It's over 300,000 lines of code.  It's not even best used on a tablet since there is lots of interacting and typing and lots of multitasking.  There is a server components that the customer must host in their own datacenter or on our azure cloud servers
You just don't rewrite something like that to work in a completely different UI because a few people have gone to Win8 on their desktop and like the emersive design concept.  Even if we outsourced it to India it would probably take a year and cost about $250k

Cleavitt76 says:

I'm not trying to be argumentative, but I really don't get this.
 
I spend most of my day in those same programs along with some other IT related desktop programs.  The Start Screen doesn't slow me down at all now that I'm used to it.  How much time do people really spend on the start screen/menu anyway?  You open it, launch a program, and you're done with it.  I do agree that the Start Screen could use a little more functionality and customization (better grouping, tile size options maybe), but all this talk about how it is killing productivity is way overstated in my opinion.  I just create some named groups on my start screen and orgainize the programs I need under those groups.  I can actually launch most of my programs more quickly than I could with the start menu because I don't have to go through the "all programs > some folder > maybe another subfolder" routine.
 
As far as Metro/Modern UI apps, if you are on a desktop trying to do real work, just don't use those apps.  Uninstall them all if it makes you feel better.  It's that simple.  Metro apps are an OPTION for use on tablets or touchscreens.  If you are working on a triple monitor quad core beast of a desktop PC then just keep using your desktop apps like you always have.
 
I have to admit though, I didn't like it at first either.  I immediately installed Classic Shell when I first got Windows 8.  After a week or so I realized that I should at least give the real Start Screen a chance.  After acutally making an effort to organize it and after using it for a few days I uninstalled Classic Shell and never looked back.  There was basically no difference in effeciency one way or the other.

OMG55 says:

No it won't only stupid idiots like you will! I have already deployed 60 Dell Optiplex AOI all-in-one touchscreen desktop in my organization and the support ticket are non-existant, unlike Win 7 support ticket. Heck event the 57-65 year olds love it. I only showed them once how to use it after install and bootup. You would be surprised. Even my GIS group uses win 8 & love it. People are hesistant to change and you sir seem to be of the motto, "If it aint broke, don't fix it"; your are the exact type of person the world doesn't need making decisions on tech because we would still be in the dark ages if you did. Technology will advance without you, just keep using the same old stuff.

Spicymikey says:

So you subscribe to the notion that if it aint broke fix it anyway?  Good luck with that one.
The desktop wasn't broken.  They need a product for the tablet and phone world.  They got it with Win8.  It's great.  But it's no good for everyone.  That's just a fact.   Sales show that.  I'm not making this shit up.
Also, even if Win8 WAS good for business users, you don't turn things upside down for no reason.  Driving on the left side of the road is perfectly fine.  No better than the right.  What if the government said tomorrow, ok, everyone is going to have to drive on the left now.  Why not?  Works just as well, maybe better.  Doesn't matter that everyone's used to the right, screw it. 
MS already realized that and left the desktop as an integrated feature to flip to.  So why mess with the rest.  This is so simple to fix.  First, bring back the drill down menus.  Second, stop only advertising Win8 as a consumer product.  Start talking to the business world with your advertising.   Then sit back and let it all evolve more naturally over time. Don't force your customers to change for no reason. In 10 years everything will be voice and touch, but for now it isn't
 

spaulagain says:

10 years? Try today. You know why PC sales are down? Because everyone is keeping their old desktops and buying tablets and cell phones instead. Those are all touch screens. If MS delivered a touch optimized OS any later, they would screwed for the drastic change to touch in the market happening now. Even Apple has started bring its iOS based elements to OSX.
People like you are why MS has been stuck in yester year for so long. You are so resistant to any change that you vomit in out cry if they change the color.
Meanwhile, Apple and Android come in sweeping up the market with touch optimized operating systems and devices.
Again, take the 5 seconds to learn the OS and the fact that it does everything Windows 7 and more. Then you will be fine.

Spicymikey says:

They needed to do this OS. They needed to do it 3 years ago. Not arguing with that either. I'm trying to point out what is WRONG, not what is RIGHT. Do you honestly think everything is great with this product? It has serous flaws and shortcomings but is a good step in the right direction. They need to address several things. Again, relax man, I'm not a troll. I'm a Microsoft guy for 20 years straight. What's with you fanboy's? Can't accept things could be better?

ChrisLynch says:

But always concentrating on what is "wrong" isn't the right approach IMO. If you always saw the negative, you'd never appreciate the positive.

Spicymikey says:

That might work in some areas of life, but not business.  Only the paranoid survive, as the great Andy Grove once said as he led Intel through the 1980's.  It's true.  They are coming for you.  They want to eat your lunch.  Hurry up and make it better before your competitiion meets your customers needs and steals them from you.
 
 

ChrisLynch says:

And this is where we disagree again.  I'm not going to argue business practices with you.  But suffice it to say, the paranoid do not survive.  They only serve to try to boil the ocean, which never works.

Spicymikey says:

Sorry Chris I don't get what you're saying.  That sounds to "california" for me.  I'm an east coast guy :)

Rishicash says:

Hey Mikey boy....since when did California become a pejorative? Just a reminder...Silicon Valley is in California. :)

Spicymikey says:

Sorry, to provocative? It was late :)

Just mean this has nothing to do with being negative and boiling the sea. W8 is very good. But I believe they made a mistake in a couple areas. Its good to move forward but you gave to take care of your existing customers and their wants. Be arrogant and ignore your customers concerns at your own peril. They could have left the start button there for the RTM. And then in 8 1 when they had a FULLY thought out replacement,they could have dropped it. That would have been smarter.

Rishicash says:

I'm with 'ya brother. Just wonderin' what you had against California. Hollywood doesn't count. It was left here by accident. 

Btw...ever seen The Californians on SNL? :)

Spicymikey says:

No offense.  Ya I'm from New Jersey.  So "The Californian" on SNL is our view of the state.  I'm sure Californians have an equally unflattering view of us :)
 
When I heard Chris starting to get all "peace and love" on me, I thought of the West Coast.  No real insult meant.  An as you mentioned.  Apple and Google are in that state and kicking Microsofts butt at the moment

Rishicash says:

"I'm sure Californians have an equally unflattering view of us :)"

As in The Jersey Shore you mean?  :)

The difference between the two is one is fictional! -<

Sad to think that Snooki and Sturrrt have become our cultural ambassadors, eh?
 

Spicymikey says:

They're both caricatures of the states. But its true that these idiots are role models for some :/. But we digress

Eas195 says:

I disagree. I have Windows 8 on my traditional PC (with keyboard and mouse, not touch) and it ran like a fire.

laserfloyd says:

Edit, wait. no. what. Damn reply ended up in the wrong place.

Joe Belfiore may now teae all that he wants.

abond32 says:

Good drop it maybe they'll wake up

NIST says:

Sounds like a great time to buy. Microsoft isn't going away and still the big dog.

Beshoy Hanna says:

I don't blame them tbh. Microsoft is on track to reversing opinions about their brands. Bing and Windows Phone are gaining ground, But Windows is going down the tubes. So I say this is pretty fair as of right now

Dratwister says:

Oh, the analyst again eh? Just like the time when they continuously telling us to buy AAPL cause it'll rise like heaven...

greg2k says:

Most of these analysts are about as brain-dead as most tech bloggers but with degrees in economics.

Cleavitt76 says:

Lol.  Present company excluded I'm sure. 

greg2k says:

Of course, my "most tech bloggers" excludes the folks at WPC ;)

inteller says:

that's because they were drawing big shorts.  Never ever listen to these wall street insiders.  Their sole purpose in life is to suck more money out of the individual investor and into their coffers.

Kadcidxa says:

"participant in the new era of consumer compute". Thats what Windows 8 is doing.

This is not bad at all... given that Goldman Sachs and most of the big companies that were behind the financial crysis in 2009 are effing money bags and sellouts these guys must be interested in Microsoft somehow... they might turn a blind eye to Windows Phone and "not" predict a successfull future in order to drop stock prices and actually aquire some or tell "special" investors to buy their stock when the price is low... 
I reackon they think quite the oposite... they think Microsoft has got the key to do well and integrate the whole home from entertainment systems and cellphones and want to make a profit out of it... Mark my words...

R0bR says:

Not only were they behind the financial crisis they reaped great profits because of it. Not the people I would take advice from

programx says:

This is nothing to worry about. If GS say "sell", they actually mean "sell so we can buy for less". Remember, GS are the very last people you should listen to for financial advice. These are not the first stocks that they have attempted to depress.

" If GS say "sell", they actually mean "sell so we can buy for less".
 
 
This is exactly correct. And when they've amassed enough MSFT stock to turn a suitable profit they'll suggest a buy.

The worst thing is that, rather than this comment being dismissable as the ravings of a lentil-munching pinko nutjob or the work of someone wearing a Bacofoil hat, this is a reasonable and logical explanation.

MobileVortex says:

Lowering Prices means BUY BUY BUY.  To think that M$ is going anywhere is just plain stupid. 
 
 

On one hand, Microsoft isn't going away any time soon.  They're too big, and entrenched in enterprise, and they'll stay relevant in that space for a while.
Their weakness, outside of Xbox, is in the consumer market, and importantly, mobile.  Despite any gains in Windows Phone take-up, over the last couple years since its introduction, it's still in the low single digit share number of the total mobile market.
Also, even in the traditional PC business, most of the selling is due to the fact that Microsoft is no longer considered a growth stock/company.   PC sales are flatlining, and there's little growth, if any, left in that space.   Windows PCs have turned into a low margin, commodity business, where profits can only be had by maximizing and squeezing your supply chain for pennies in profit.
Microsoft is probably now more in line with a traditional, dull, utility company.  Sure, your local utility is likely cash rich, but who's excited about investing or following those?

Spicymikey says:

Agree.  They act like a Utility too.  Too slow for their competitors who tend to run circles around them.  In the past they always had the huge war chest advantage to simply buy their new businesses rather than invent them.  Now their competitiion is as strong and big as them.  Apple already is turning into another Microsoft now that Jobs is dead.  He was their only secret weapon as their business model of exclusion doesn't work well in this market.  I don't worry about Apple.  They'll be gone before Microsoft.  But I worry about Google.  It's a formidable enemy.  Google may even buy Microsoft in 10 years at this pace.

I could see Apple turning into more of a content company.  They have the cash for, and wouldn't put it beyond them, to eventually buy a full blown movie studio.    In essence, Apple is the 'new Sony'.

Spicymikey says:

Apple better do something fast. As tentative as the situation is for MS, I see it worse for Apple. It's just that no one has noticed yet. Microsoft almost killed them off in the mid 90's until Jobs came back and began innovating again. They went from top of the mountain to virtually bankrupt in a little over 10 years. It can happen again.

deloa84 says:

I totally agree on this and it seems their mobile devices is what keeps them afloat right now (iPhone, iPad etc). Their overall Mac sales have decreased as well.

Spicymikey says:

Also true.  PC sales are down 14% but MAC sales are down 20!  No one's talking about that.  They've already lost their control of the mobile industry worldwide.  USA is an exception because of our LOVE for all things Apple.  But that will fade again as Apple becomes un-cool again.  Then they are done. 
 
Maybe Microsoft and them can team up to fight Google in 5 years. :)

jmshub says:

I see google suffering more than apple or Microsoft in the future. They are, when it comes down to it, an advertising company. They pour money into projects like glass and self driving cars and plus. Chrome os is a mess. They don't make a cent on android. Right now, they are THE tech company, but I think they are starting to lose their cool. Things like glass, google tv, show that they have plenty of flops. If someone else came up with an innovation in search, the goog would find their one trick looking stale.

spaulagain says:

@Spicymikey

So you recognize that MS is old minded and stuck in the past while Apple and Google are pushing the future. But you criticize MS when they modernize their products to compete with Apple and Google.
Makes perfect sense. :-\

Spicymikey says:

Seems when I say something critical you black out and hear nothing else.  I've debated with you before on other threads.  Please go away.  You're just a fanboy.

spaulagain says:

How do I black out? Because I call you out when you contradict yourself? Why should I go away when you won't?
 
lol, and I'm hardly a fan boy. Although I have always been a Windows user, I have always felt Microsoft has been behind Apple in the polish and execution of their products. Their UIs have always been so, so, if not horrible. It wasnt until Zune and then Windows Phone that I saw MS do something good with their user interfaces. In fact, it is Windows Phone and Windows 8 that has drawn me into a full time MS user on everything, email, skydrive, etc.
 
I reply to you because most of your complaints about Windows 8 are frivilous or just poor excuses to hate on it. Then you go and make remarks at how old school MS is, and that they are like a utility company. So I don't understand what MS can do to make you happy. They stay with status quo and continue to their old schools ways, you complain that they arent innovative enough. They drastically innovate and progress their products and you complain they changed their 20 year old product to something a little different.
 
Seems like no matter what MS does, you think you know better because you're some uber programmer.

Spicymikey says:

Hey spaulagain, did you see this article on nbc.com today.  If I am some over the hill "uber programmer" and an idiot, I guess i'm not alone.  People that defend something in the face of clear evidence are destined to fail.  It seems to be a flaw you have and I hope you can be more objective in life as you go forward.  it will hold you back and cause you to miss opportunities. 
 
You build a product, listen to your customers crtique it, find out the misgivings, and rebuild it better.  if you try to TELL the customer what he/she wants, you are going to fail.  Microsoft is a winner, so Microsot WILL do what I am talking about..   THey WILL realize they made a small mistake and need a course correction.  Not a big deal.  The idea is good, now fix it and make it more productive for business like the article says.

I can't embed a link but go to nbc.com and serarch for "7 ways to bring back the pc".  here's an excerpt:
 
"If you have a working 3- or 4-year-old PC, you have few reasons to upgrade and one really big reason to stand pat: the new Windows 8 operating system makes it harder to get things done."

G.S.??? Isn't this one of the companies the started the toxic assets crap that almost ran this country into the ground? Sounds like someone is trust. They should be in jail, not in business.

procen says:

That was I thought, but I rather see them predicting behind bars where they belong.

Simon Tupper says:

Microsoft was outperforming with 2 good quarters back to back and then the PC market dropped more than predicted by that analyst(and they are always wrong). This is not good. If Microsoft was a book, this would be the climax.

hwangeruk says:

I love a climax. Skeet skeet :)
https://bitly.com/ZpNLce
 

theefman says:

MS needs to rectify the issue of their atrocious advertising for Windows 8. Without educating consumers on its features and benefits no one is going to buy it. Enough with the dancing and clicking the kickstand, tell people about Snap, syncing info, the digitizer, and its speed. Its high time they told people exactly what they are buying and why. Otherwise they deserve to fail.

Montpbm says:

Agreed 100%

Well I love Microsoft and use windows 8 and office 2013 or 365 and its a shame they haven't pushed WP8, which I recommended to everyone I know, they still lack apps and games, and ask you to pay for games which are otherwise free on android, even though they are add supported. Google fought apple by producing a great mobile ecosystem, cheap and well built tablet like the nexus 7 and in loads of other ways. Why has Microsoft taken so long to wake up and fight back, why is Google still innovating and Microsoft just copying and doing it wrong and always a minimum of a year late, now they are thinking of pushing a Microsoft 7 inch tablet, a year late to the game once more, and knowing Microsoft's luck they will get that wrong too

GMJeff says:

You say late, Microsoft is looking at it as seeing the competition's wares and producing a device that can challenge it.

Granted, they lose market share and mindset by coming out with products after other businesses, but they have had success with some products. The Xbox comes to mind.

The problem with their business attitude right now is that they are way ahead of the curve. They are formulating a ecosystem of devices that may not see fulfillment of their vision for many quarters from now.

Sometimes companies have to bite the bullet and take the losses. How many companies can successfully hit on an idea overnight, instead of spending time building the reputation and name branding for an item.

I am sure Apple had waited a few years before the iPhone was formally introduced, as they wanted to study market trends and to find a way to tell people that they needed...nay...wanted the phone.

Android/Google is the same way. They were not overnight success stories.

Goldman Sachs is jumping the gun. Their speculator is not looking at Microsoft's big picture, or their ecosystem that they are working on as a whole.

Unless as a poster mentioned earlier, they are downgrading just to be able to buy millions of shares at a lower price.

I just hope they stop playing it safe and actually start producing great products, Nokia kept playing it safe and analysing the market and now from being the greatest phone manufacturer they are almost obsolete, if they don't push there brand and products into today's world instead of living in the past, they will end up losing too much reputation and never make it back.
Everybody knows Nokia, for example, as one of those companies that were great back in the day, and are now useless, even when Nokia pushed out great phones like the Lumia 920, which was a fantastic phone and deserved a lot more credit than it got, nobody cared, save for a few loyal Nokia customers.
I just hope Microsoft doesn't become the next Nokia, that is that it becomes too late to win back its reputation and no matter how great the product is, its just forgotton about.  Surely the creators of Windows and the XBox will be able to push back instead of cowering in the corner and playing it safe.

lubbalots says:

With the next Xbox coming and xbox360 is the best selling and skype and the rest of MS ventures they suddenly did this? Goldman ball sac is one of those contributors to the housing crisis and here they have the tenacity. If MS goes down, alot of companies will be going down. How do we stop these fuckers!

esaud says:

Lol the last phrase was the best: lets stop them +1

onysi says:

goldman ballsac.  HAHAHAHHAHHAHA i love you!

Spicymikey says:

What the author fails to see (but the investor community knows), is that Microsoft has moved glacially slow in the last 10 years and continues to do so.  They watched the fast moving enemy advance on their empire for many years now and refused to engage them out in the open where they were weak. 
 
Well, the enemy is at the gate now.  Can they fight in hand to hand combat now?  I hope so.  I have a business that depends on their continued success.  I never worried before but I'm worrying now.

blakkrobb says:

No numbers on hybrids since they count more as tablets than PC's... I find it a little funny that Microsoft is being blamed dwindling PC sales. Could it be that more people are building PC's instead of buying overpriced junk? Does Macs not count as computers? So dump the software company because hardware isn't selling but not the hardware companies that make the products?

lubbalots says:

I thought the same thing! Plus MS have XP, w7, vista, out there. If the pc's are dwindling, its because the hardware overpriced! Look at all the great w8 tabs, laptops, and pc's out there. Frigging >500$. No one has that kind of money nowadays whereas consumers can just buy a cheap kindle and use their 50 year old typewriter.

Ordeith says:

Or.. this is a coordinated attempt to depress stock price to increase profit for a buy in just before a good earnings report....
 
 

I'm with you 100% haha check out my post above

Mouthsmasher says:

It sucks to hear, but this is not exactly a surprise to me.

De-throne Balmer, I say.

ninny1176 says:

Bingo...and then hire a good marketing company...maybe the same on BP hired.

longcipher says:

The only thing holding them back is their image. Their products are fantastic and getting better. Windows 8 is the beginning of a paradigm that Apple and Google will copy. But none of that matters because MS has a bad reputation. They can start by giving Ballmer his walking papers and thank him for his guidance thus far, but it's time for new blood. Then they can hire a PR firm who knows how to actually market the Surface without those terrible dancing ads. Finally, the same firm can tell the world about the new MS. They need to flip the game and tell people who they instead of being defined by Apple and others.

I really love windows 8 and what it gives us but why aren't people intersted in it? It's quite puzzling. Where I live, windows RT is doing great, people reserve units to get their hands on when it's out of stock and such, but it seems like MS is struggling. I'd love to see them get the hang out of it.
Product placement and image is where they are failing at. Marketing is the single most importante thing now a days, tech is just too smiliar, people need some connection with the brand and some diferenciation. Look at apple, they sell themselfs as superior, people assosiate with it and it's a win-win.

Shambels says:

Maybe this is the motivation MS need in order to not "half ass" their products. I like MS but they need to wake up!

dasfoto says:

what do you mean by "half ass" their products? I don't see anything half-assed with any of the products I'm using. I bought the windows phnoe 7 (HTC HD7) on the first day and found it quite polished and stable. I bought the Lumia 920 running win8 on the first day and found this product even more polished and stable. I bought a Surface RT on the first day and have had no significant issues with it or its applications or the Metro interface. People keep yelling "Apps, Apps, Apps!" and "Specs, specs, specs!" and it's all BS. Microsoft suffers more from bad-mouthing by tech bloggers and tech "journalists" who, for no rational reason, hate Microsoft.  But, as many have said in other posts, Microsoft isn't going anywhere soon, and like the Xbox, it's only a matter of time before WP8 and W8 reach a critical mass with the general public, and all these hacks bad-mouthing Microsoft will be overwhelmed by the satisfactoin coming from the actual users.

Shambels says:

Their products are rushed to some degree. Lack of notification center, the whole edit layout of the start screen for windows 8 could have been better not to mention when you run dual programs where one is 1/3 the size of the other and cannot be resized to show both equally. They should have made two versions of windows 8 one for touch and the other for regular desktop. I love my Lumia but Microsoft has too many restrictions on the WP OS (granted 100 times better than IOS) and they need to come off. Xbox music needs improving as well both with syncing music and being able to go back to the artist list without have to press the back button several times, which is a pain in the ass when driving. My 2cents. I do agree that the media is destroying MS.

onysi says:

time to buy buy buy.  microsoft isnt going anywhere.

Levent Cinar says:

Those guys huh tHe same guys who put greece into mysery by offering to help them and instead, multiplying their debt by 10. also, because of that they were able to extend the american crisis (which they also started) to europe. And that's when they infiltrated mario draghi and made him the head of the european economy.

if they can make obama their bi***, enslave europe and own apple, why couldn't they own microsoft as well. Anyways i applaud their way to make safe bets. to kick MS while they are going through hard times to benefit more from apple and when apples downfall is on its way, they can cash in from ms or from somewhere else. heck, they own the world that is greaaaat!

rockstarzzz says:

This is sweet! After stocking up on some substaintial NOK, time to grab some good valued MSFT and wait for mangoes to ripe! I have some spare coins lying around ;)

gavir says:

Not to mention the massive amount of revenue generated by decisions such as servers and tools, research etc. Microsoft will be perfectly fine.

gknowd says:

Coming from the same Goldman Sachs that took billions from the US tax payers...i won't give much credence to their outlook on MS

poddie says:

Imo, what they really need to do is get more aggressive with updates. They need to look at the top 50 requests on the WP voting site and say to themselves "these WILL be addressed in the next update.". MANY of them are really pretty minor coding (screen rotation lock and even notification center, for example).

They have been focusing so much on building strong internals that the visible external features that are standard on other platforms are not being worked on. Do it. Stop saying "we will get to those" and GET TO THEM.

inteller says:

1.  Listen to what Goldman Sachs says
2.  Do opposite of said thing.
3. ?????
4. PROFIT!

saulgould13 says:

Coming from the same knuckle heads who say sell precious metals while they hoard and stuff their own coffers.. I trust these gamblers as much as I can throw them..2008 for those with short term memory.

GekkoAce says:

Windows 8 is not liked by most consumers. The start screen is too drastic of a change and is not visually appealing to most. The people in the forum tend to be MS fans, so I know you disagree with that statement.
I was a Microsoft fan too, but I got tired of waiting for Microsoft to put out an ecosystem that competes. My work gave me an iPad and I haven't touched my Surface RT since.

AndyGriff says:

This is of little consequence.  If Microsoft's only irons in the fire were in consumer-market personal computers, they might have something to worry about.  However, that's not the case.  Not only are they doing well in other areas of the consumer market but they're also very deeply-rooted in the corporate world, especially in server technology, something in which neither Apple nor Google seem particularly interested, not yet anyway.

xFalk says:

HOW THE STOCK MARKET WORKS:
Performance was strong but not as strong as analysts predicted: TIME TO SELL
Performance sucked but didn't suck as much as analysts predicted: TIME TO BUY

uselessrobot says:

I think there are two factors in play here:

1) The economy is still weak and arguably weaker than some suggest. If people are spending they're doing so elsewhere.

2) Computers don't age nearly as rapidly as they once did. You'll still get good performance out of a relatively old machine, it's not like 10-15 years ago where a cheap PC was already struggling to run current apps a year into ownership. It's hard to convince your average comsumer that they need go out and buy a new PC for an OS alone.

Where Microsoft needs to make an impact is with smartphones and tablets so that they can be seen as a credible player. Whether they've got the organization to pull it off remains to be seen. Things are looking positive, Windows Phone has surpassed Blackberry in market share, but it's probably not moving as quickly as the "experts" would like. And they're probably still too much in love with their iPhones to see the world any differently.

Shambels says:

Agreed PC arnt dying they are just ageing slower now. I bought a Asus G73 in 2010 and that thing still runs with the best of them! Plus I don't want to spend 1300 every year on a new PC....and that's what allot of consumers agree with. Phones and tablets age faster so the market shows faster growth. My iPad 2 is almost ancient now and I got it late 2011...sigh. I'm hoping my Lumia will get more life than that!

ralexand56 says:

Man, wish some capital to buy with now.

WayCool says:

Awesome !
Time to buy me some MS !  Thanks GS !

Villain says:

Stock holders kill inovations... when a company is public, stock holders care about one thingand that is money.
a big thing that for stocks over the last few years is rumors... insane that rumors and sites running rumors can affect stocks... like right now the next xbox has a lot of foolish rumors going around.
 
 
While I love Tiles and the look of WP8 and Windows 8 and it's really well suited for touch devices... the simple lack of the start menu being removed is from regular PC's/laptops was a dumb move. I like W8 and comfortable with it BUT it just seems unproductive not to have it. just update and have the start menu and have both the metro start screen and start menu... simple simple fix

ScubaDog says:

And we're listening to a company that had to get BAILED OUT because WHY?  GS can bite me.

GS are the biggest liars on Wall Street. They say sell because they're sitting on a pile of Apple and Google stock they want to sell. They will be buying MS stock offshore.

Well no one can say that MS is not trying to adapt. Hopefully they'll stop shooting blanks.

Zeroplanetz says:

Yay I can buy Microsoft stock soon!

rebel_yell says:

Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who take the subway. - Warren Buffet
Another highly successful investor (whose name escapes me) once said - When the word on the street says sell, that's when I buy.

lubbalots says:

If I was a billionair, I'd buy it all, including Heather Bellini!

lubbalots says:

There's something fishy with that lady from G ballsach.

rebel_yell says:

By Jove, you made me chuckle, old chap.

snowmutt says:

Okay, let's take a look at what these investment companies are for, then apply it to this article.

Basically, these type of companies appeal to one or the other of these 2 types of investors: The long range, many years down the road investor in which smaller amounts of money is at risk looking for steady growth, OR huge money investors who play short term investments looking for larger gains. Goldman/Sachs is NOT for the long term, they are advising those in the large money bracket.
So, if you are investing large amounts looking for a quicker profit (think less then a year or 18 months), is Microsoft a great buy? Windows 8 is the future, but it is a shaky sell out of the gate. WP has yet to explode, and XBOX is a great system that is honestly in a market that is smaller in profits then any other market they are in.
Microsoft is still a great bet for a long term, several year or longer investment strategy. But for a shorter turn around, I agree you need to invest elsewhere.

love me some Microsoft, but the 10 year outlook is better then the 2013 alone.

Took a look see about Goldman Sachs on wikipedia.  The Controversy section is longer than the corporate affairs bit.  
So yeah... in essence.  I think I'll take anything that sector has to say with a grain of salt.  

Happened to blackberry too before and after the release of blackberry 10...ppl who understand stocks should do their own research. Someone's making a profit from whatever you decide, so it might as well be you! :)

waynejk says:

Financial analysts are as trustworthy as meteoroligists -- predicting the future with zero accountability. Maybe PC sales would be down more than 14% if it weren't for Windows 8?

brorim says:

Who the fuck cares.. Prime example of big business abusing sites like these to manipulate..

pr0phecy says:

Dwindling demand huh? Well then they can downgrade Apple's stock from neutral to free give-aways XD

ItsMrMark says:

Windows 8 is a great operating system if they would just get rid of the "Metro" part of it.  The UI looks terrible!  I don't spend any time in the "metro" UI and think Windows 8 is an improved Win 7.

sholokov says:

Wrong. Many love metro. You want desktop mode, stay in desktop mode. I prefer metro, especially on touch devices.

abond32 says:

#screenShotsWp8 use this hash tag on twitter along with your screen shot. Microsoft won't show off the features of this great device then I think we should.

ricocchet says:

Goodness knows why Microsoft dont focus more on the Tablet Market and just fill the market with reasonable priced tablets, the prices for the surface are ridiculous, its one of the biggest growing markets, and Microsoft are missing out at the moment......

sholokov says:

This is in preparation to BUY on new Xbox announcement.

tyjamcam92 says:

This coming from a company that took a bailout a few years back due to bad investments......