Microsoft is shopping with billions of dollars.
The company recently agreed to pay a whopping $ 19.7 billion for Nuance Communications, which provides artificial intelligence-powered assistance to health professionals, in a deal that came not very long after the purchase of video game publisher Zenimax Media last year. .
Meanwhile, Microsoft is said to be in exclusive talks to acquire online group chat platform Discord for a whopping $ 10 billion, previously made an offer for the U.S. business of viral video app TikTok, and reportedly in fateful talks with Pinterest for what would have been a deal of several billion dollars.
With the money to spend, the company closed fiscal 2020 with $ 136 billion in cash after the pandemic forced a shift to remote working and led to an explosion in Microsoft’s cloud and productivity software. Experts say that with its nearly $ 2 trillion market cap soaring – and its leading rivals slowed by regulatory oversight – we can expect Microsoft to open its wallets to businesses large and small for the rest of the year and beyond.
“Microsoft is on the M&A warpath for the next 12 to 18 months and Nuance could be the first step in increased interest in deals in 2021,” Wedbush Securities analyst Dan Ives said in a note to clients.
Insider asked nine industry analysts which companies could be next on Microsoft’s shopping list, as it aims to strengthen existing businesses and reach new businesses through acquisitions.
Some analysts say Microsoft could use M&A to bolster its cloud division, where it is considered the number two player behind Amazon Web Services market leader in cloud computing. This is especially important as Google is making progress and IBM and Oracle are building their own niches in the market.
It could also continue on the path taken by the Nuance deal and buy more AI startups, strengthening its presence in a key tech sector. Other experts suggested Microsoft would investigate startups in spaces as diverse as geothermal energy or the removal of “rogue drones.” Some have suggested that Microsoft could spend more than ever before on established names like Twilio, Okta or even Twitter.
Here are 22 companies that analysts said it would make sense for Microsoft to acquire. (All private company valuations are from Pitchbook unless otherwise noted, while data on listed companies is accurate as of Friday afternoon.)