A Spot of Luck with Tech

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Now, one often hears talk of ‘monster stocks’ – frightfully impressive beasts, they sound, though thankfully they don’t breathe fire. The aim, naturally, is to acquire a few for one’s portfolio, hoping their substantial gains will offset any unfortunate plunges into the financial abyss. It’s a bit like hoping a particularly robust aunt will cover the losses from a disastrous wager on the village cricket match, really. One doesn’t expect miracles, of course, but a bit of upward momentum is always jolly decent.

We shall now consider two such specimens, firms that have performed rather handsomely of late and, dare one say, might continue to do so. It’s not a guarantee, mind you; the stock market is a fickle mistress, prone to whims and sudden changes of heart. But they seem, at the moment, to be on rather solid footing.

Microsoft: A Most Competent Sort

Microsoft, you see, is a truly colossal affair. It encompasses everything from the Office suite – indispensable for any self-respecting clerk – to the Azure cloud, a rather mysterious realm where data apparently frolics, and even the Xbox, for those inclined to digital jousting. They’ve been doing rather well, averaging a most respectable 25% return over the last decade. And, confound it, they’re still growing! Their recent quarterly report showed revenue up 18%, and net income a tidy 12% higher. Not bad, not bad at all.

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The truly clever bit, you see, is their investment in artificial intelligence. Old Satya Nadella, the chap at the helm, describes it as a ‘planet-scale cloud and AI factory’ – sounds rather grand, doesn’t it? – driving ‘broad diffusion and real-world impact.’ It’s a dashedly clever bit of code, what! They’re pouring money into it, of course, but when one is already swimming in the stuff, a bit more hardly makes a difference. And it’s not as if they are short of a bob or two, generating more cash than they know what to do with, and even paying out a dividend – a modest 0.77% yield, admittedly, but it’s been steadily increasing since 2020.

The stock, at present, seems reasonably priced, with a forward P/E ratio of 29, which is only slightly below its five-year average. Wall Street analysts, those discerning chaps, are generally rather bullish, and one can see why. Much of their business, you see, is with other businesses – firms using their services to remain productive and, crucially, secure. Their Azure cloud platform, for example, saw a 40% revenue boost in the last quarter. A most impressive feat, wouldn’t you agree?

Netflix: A Bit of a Wild Card

Netflix, now, is a slightly different kettle of fish. They’ve averaged a 24% annual gain over the past decade, and they, too, are still expanding. Their last quarterly report showed revenue up nearly 18%, with net income up 29% and projected to rise another 35% next quarter. The key to this, it appears, is their advertising revenue. It’s grown more than 2.5 times over the past year to over $1.5 billion. Rather a clever move, that, if one does say so oneself.

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The stock has dipped a bit recently – about 12% over the past year – largely due to all the fuss over their potential acquisition of Warner Bros. Discovery. A rather large undertaking, involving a bid of over $70 billion. Others are interested, of course, and some worry Netflix might overpay. A perfectly reasonable concern, one thinks. One doesn’t want to end up with a bargain that’s more trouble than it’s worth.

Interestingly, the stock seems rather appealingly valued at the moment, which is unusual. Its forward P/E of 27 is well below its five-year average of 33. A spot of luck, perhaps? Take a closer look at either, or both, of these firms if they strike your fancy. And if they don’t, rest assured there are plenty of other compelling growth stocks out there, waiting to be discovered. One simply has to know where to look, and, of course, hope for a bit of good fortune along the way.

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2026-02-01 21:22