HOW TO PLAY IT

Microsoft is the best way to play the rise of software developer tools. The enterprise software giant in 2018 purchased GitHub, an open-platform competitor to GitLab. The $7.5 billion all-stock acquisition gave Microsoft access to the Linux community, a showcase for its own developer tools and services and a way to monetize

the developer community. In the fiscal year ended June 30, 2019, its Intelligent Cloud division, where GitHub landed,

reported $39 billion in revenue and $13.9 billion in operating income, gains of 21% and 20.9%, respectively. Although Microsoft shares are up roughly 28% in 2020, company outreach to developers and the growth of its cloud business could lift the stock to $290 in a year, a gain of 41% from

current levels.

Jon D. Markman

is president of Markman Capital Insight and the editor of Fast Forward Investing.