1. Stock price remains the same but revenue doubles.
2. Revenue stays the same, but stock price doubles.
Assuming all else equal, and recognizing that this is absolutely a simplification, but if these were the two choices then it seems a no brainer that you'd go with option 2. Revenue is a means of increasing stock price.
If you're holding MS stock long-term, and you plan to gradually shift away from equities as you near retirement and then gradually liquidate your holdings to fund your retirement, juicing the stock in the short term does nothing for you.
If you're holding short-term, then you also need to sell the stock after it gets juiced, so that you can move your capital to not-yet-juiced stocks.
So really, which investors does short-term stock juicing benefit? Insider traders, I guess.
Stock prices were, are, and will always be rough approximations of the NPV of future profits. It’s not perfect, of course, but it’s roughly true.
Doubling revenue in any remotely sustainable way will have way more than a 2x impact on stock price because of exponential growth. So yeah, as a stockhodler, you’d rather double revenue with flat stock price because you’d buy the crap out of the stock when you realize the market has not factored revenue growth in to pricing.
Imagining that public companies care about stock price more than revenue is literally like saying a hungry customer care more about pizza radius than area.
The goal for an investor is captured in the stock price itself. In programming terms, a corporation is a function whose output is its stock price/market cap, and revenue is but one of a host of inputs into that corporation that determines what the stock price is. Other inputs can be operating expenses, whether dividends are issued, future prospects for the company such as entering new markets etc etc... and you can have beliefs about how those various inputs affect the output or how these inputs change the output over time (short term vs. long term), that's perfectly fine... but when push comes to shove, the goal is not the revenue, it's not entering a new market, it's not reducing operating expenses... the goal is increasing the stock price (well technically the market cap).
I have not looked at MS in particular, but generally that is what the remuneration of the people at the top of most public companies is most strongly linked to.
