Cramer: Microsoft Is Undervalued, Especially After Shake-Up

Microsoft's newly announced restructuring plan could create significant value for shareholders and may change Wall Street's opinions of the company, CNBC's Jim Cramer said Thursday.

Cramer spoke on "Squawk on the Street" after Microsoft announced a long-awaited restructuring, organizing itself around key areas designed to make the company more nimble in the face of fierce competition in the technology sector. CEO Steve Ballmer dubbed the goal of the broad shake-up "One Microsoft".

(Read More: Microsoft CEO Unveils 'One Microsoft' in Broad Shake-Up)

A streamlined organization would help Microsoft create value, namely unlocking the company's "chronically underrated" entertainment division, which manages Xbox, Skype and Windows Phone products, Cramer said.

(Related: Cramer: 'I'd Love It' If Microsoft Spun Off Xbox)

"This company is undervalued. I am a believer in Ballmer," Cramer said. "He has a legacy to preserve here and I think he can do it. I do believe his legacy is at stake and he's going to win here."

The 'One Microsoft' plan may have been inspired by another successful restructuring, Cramer noted. "One Microsoft. Where did we hear that term? One Ford. Who did Ballmer meet just two weeks ago? [CEO] Alan Mulally from Ford," he said. "This is exactly what Mulally did to streamline his organization so effectively. I think Ballmer is taking a page from Ford and I think it works."

(Related: Cramer: Invest in These Terrific CEOs)

Cramer pointed out that there have been several key downgrades on the company in recent months—when the stock was trading closer to $27 per share—but said it will be telling if any of these analysts change their opinions now. "One Microsoft is a reason," he said, as the stock hovered above $35 per share.

In a release on Microsoft's restructuring, Ballmer said the realignment would make Microsoft "innovate with greater speed, efficiency and capability in a fast-changing world," while helping the company "execute even better" in creating devices and services.

—By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul.