Microsoft Corp (NASDAQ MSFT) is a laggard no more. After more than a decade of bobbing around the $30 mark, Microsoft stock is up 70% since April of 2013. Money Morning Capital Wave Strategist Shah Gilani recognized the surprising turnaround early on, and started publicly recommending MSFT stock in July 2013.

Back then Gilani liked that Microsoft paid a dividend that was likely to rise, and predicted a “shake-up” at the Redmond, Wash-based tech giant that would propel MSFT stock to $50 before the end of 2014.

“Other analysts thought I was way out on a limb… swinging over a river of hungry crocodiles,” Gilani said later. “They thought I was wrong because they believed that Microsoft couldn’t change its ways. But I knew differently. As I said during a number of interviews, I knew Microsoft could change. In fact, I knew it had to change.”

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Just a little over a month after Gilani’s original call, CEO Steve Ballmer announced he would retire in the next 12 months. That paved the way for new CEO Satya Nadella to take over in February. And that’s a huge reason behind MSFT’s rebound…

Nadella’s fresh approach has helped pushed Microsoft stock to Gilani’s target price of $50, which it hit in intraday trading Nov. 14. That surge briefly pushed Microsoft past Exxon Mobil Corp. (NYSE XOM) to become the world’s second most valuable company behind Apple Inc.

Since Nadella took over, Microsoft has had several solid earnings reports. In its most recent quarter, Microsoft grew revenue 24.8%, for example, partly because of a 47% increase in its “devices and consumer business” and a 128% increase in its cloud business.

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In April Gilani described the company as a “cash machine” when he again recommended investors buy Microsoft stock.

“Over the last 10 years, MSFT’s cash return on invested capital has risen to 93%. That means that – for every $1 of capital it has invested – Old Mr. Softy has been able to generate $0.93 in cash. Yeah, you heard that right. Over the last 10 years, Mr. Softy had been a cold, hard cash machine. On a sales basis, for every $1 in sales the company generates, $0.35 gets turned out as free cash flow (FCF). Over the last 10 years, Microsoft has grown its FCF by 9%,” Gilani said.

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