Money before innovation: Why Wall Street loves tech giants these days

No innovation? No sexy new products? Investors celebrate as six old-line companies churn out profits instead

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Still, those are not bad results. If anything really stands out, it's Microsoft's revenue from cloud services, which is up by about 150 percent to an annual run rate of more than $4.4 billion.

The takeaways from both companies are pretty obvious: Both are doing a very good job at managing their business, and both are delivering very solid results that investors love. Of course, neither CEO has yet to prove that he can lead his company to exciting new products and new lines of business. To be fair, Nadella recently arrived, whereas Cook has been at the helm for three years, so the next few months will be a critical test for his leadership and vision.

The Wall Street way: I'm rich; you're fired
What surprised me the most as I listened to Microsoft's earnings call on Tuesday was a word I didn't hear: layoffs. Nadella has already said cuts could reach 18,000, and most of us expected more details to emerge. None did.

Most of the job losses are a direct result of the Nokia purchase, which only happened because former CEO Steve Ballmer couldn't figure out a way to make Microsoft competitive in mobile.

As Gregg Keizer, a colleague at our sister publication Computerworld pointed out, the bounce that owners of Microsoft stock have enjoyed since the door hit Ballmer's butt on the way out of the building has made the man a cool $2.8 billion. That's enough to pay for his shiny new basketball team, with $800 million left over. That's one hell of a reward for a man who completely missed the boat on the most important trend in technology.

Eight hundred miles to the south in Palo Alto, Calif., the queen of HP is set to lay off 16,000 people, in part the result of yet another terrible acquisition: Autonomy. Over the years, Whitman's wretched predecessors and supine board of directors have fired tens of thousands of people and made the company a study in terrible management. Whitman is still cleaning up that mess.

Nonetheless, Whitman has pulled HP out of what looked to be the beginnings of a death spiral, though she hasn't brought any excitement or notable innovation to the table. But investors are more than happy, so they have pushed the stock up from about $26 a share a year ago to almost $35 this week.

Who would have thought it? Working and getting stock options at one of these old-line companies may be a better deal than heading for a hot startup -- unless you get fired.

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This article, "Money before innovation: Why Wall Street loves tech giants these days," was originally published by Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at For the latest business technology news, follow on Twitter.

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