Stockchase Opinions

The Monthly Gems by Allan Tong Microsoft Corp MSFT-Q TOP PICK Nov 01, 2024

Its PE sank to 34.4x after that report, close to its median average of 33.94x. Its quarter was far from a disaster, so the sell-off was an over-reaction. Year-over-year earnings actually rose 10% and sales 16%, while Azure revenues jumped 32%. MSFT pays a 0.77% dividend, so you're not buying this for income. This is one to hold long term.

$412.620

Stock price when the opinion was issued

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BUY

One of the Magnificent 3 he owns out of the Mag 7. Likes the secular opportunity in cloud computing via Azure, plus entrenched dominance in business and household applications. Stalwart grower, undemanding valuation.

TOP PICK

They have lots of cash and downside protection; their office products are monopolistic. Also, growth comes from gen AI and the cloud. Is a defensive play. Yes, they had a period of dead money, but the price is now attractive.

BUY

You're buying this at a lower multiple as recently as January. If you think earnings will hold up as well as AI and data centre spending, this makes sense.

BUY

Priced well now. They will and are participate in AI. A great operator.

PAST TOP PICK
(A Top Pick Mar 10/23, Up 57%)

People are taking profits in the Mag 7. Still a top pick. AI-cloud dominance and smart investments are driving their growth. Financial strength keeps them steady in uncertain markets. Her price target is $480, another 25% upside. You could add to your position now.

BUY

MSFT is phasing out Windows 10 and pushing the 11 upgrade.

DON'T BUY

Its AI platform isn't that impressive, and MSFT has missed estimates 3 times now. It will stay a dog if it misses again.

BUY

Shares are back to July 2024. Will this be closer to $300 or $500? The easy answer is $500. $300 would mean a lot of fundamental concerns on the macro side of the market. Look for guidance ahead. Are they still on schedule to spend $13 billion this year? And what will they get in return for that? Their last Q4 revealed that their AI business surprisingly surpassed their revenue run rate of $13 billion, which was a lot sooner. Companies like this are spending alot, but they are making money back in AI.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O’Reilly

MSFT recently reported a 170% increase in its AI and cloud services segment.  It is a key player in the space and a solid company to own.  It has been prudently using some of its cash reserves to buy back shares and retire debt.  It supports a ROE of 34%.  We recommend setting a stop-loss at $340, looking to achieve $505 — upside potential of 29%.  Yield 0.8%   

(Analysts’ price target is $504.89)
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We expand economic opportunity and growth for all. Economic growth and opportunity must reach every person, organization, community, and country. This starts with ensuring everyone has the skills to thrive in a digital, AI-enabled economy, and extends to empowering nonprofits, entrepreneurs, and other organizations to digitally transform and address society’s biggest challenges. Social media mentions are up 467% in the past 24h.