Microsoft Corp (MSFT)

By far, the world's biggest software company. Scale advantage, defensive growth. Great exposure to long-term secular info-tech themes: digital transformation, cloud computing, business intelligence, AI, security. 70% of revenues are recurring. Mission-critical products. Strong incumbency advantage, big competitive moat. 

Sustainable EPS growth rate. Valuation is reasonable in view of growth prospects. Yield is 0.8%.

One of his 4 (AMZN, META, GOOG, and MSFT) main holdings in the technology space.

(Note the short timeframe.)
Still holds it, probably won't be selling; he'll wait and see. Has done well because of AI. Could move up and down around this range for a while before it breaks out to the upside. Definitely in the sideways phase.

Stalled out. His 12-month price target is $491, decent runway. Of the Mag 7, probably want this one at the top of your list because it hasn't accelerated as much as the other 6. So many horses in the race, from cloud to personal computing to business productivity. Nicely priced.

The recent sellers were wrong. The CEO is doing a good job.

Waiting to see results shake out. Mission-critical for households and businesses. Longer operating history than META, so this provides a stronger, competitive moat. Generates more cash. Came into regulatory crosshairs 25 years ago, emerged unscathed and stronger. Both are great companies, but this one's better.

META drawing ire of politicians, which is an unpriced risk he's steering clear of.

They report today. They trade at a 50% premium to the market, so MSFT must put out the same quarter as Google did last night, beating all metrics. They can do it. AWS cut a $10 billion deal with MSFT to use their AI tools. He's optimistic.

Shares are up only 15% this year, well behind peers. Last quarter was solid with 10% EPS growth. He wants to see what AI and enterprise spend are. He expects 30% Azure growth, good.

They report today. You can't expect the same 35% growth in their cloud business as in GOOG because MSFT's cloud is 3x as big. Gaming could be weak, as AMD's was. All eyes will be on Co-Pilot--she's worried that uptake isn't that big.

They report Wednesday. Is down $1.50 today. Their AI platform has gotten mixed reviews, so the stock has stalled. If sales are weak, the stock will fall. It's no longer the lock (in AI) it used to be.

He legs into stocks, not dives into them. It has formed a little base around the trend line and then started up. He will start buying in three legs of 2% as it proves itself.

The dilemma that professional money managers go through every day! If you sell a small portion of a winner, you win whether the stock goes up or down. If you sell 15% of your stake, and it continues to go up, you still have a lot. But if it goes down, you can pat yourself on the back for being so smart (and now you can buy it back).

One of his top 5. His 12-month price target is $491, so still about 20% upside. Has been dead money over the last couple of months, as the rest of the market's taken off. So many horses in the race, from software to hardware to cloud to cross-selling. Its Maia AI chip is very competitive. If it got north of $450, that's where he'd take 10-15% off.

At the bottom of the Mag 7 on price appreciation, up only 11% this year. Stock's done nothing since last reporting in July. Growth of cloud computing was at low end of expectations, and guidance was also slightly lower. No one likes a company that trades at 30x PE to miss consensus expectations. Company sees growth picking up in back half of next year. Capital spending increased 25% this year as they build out data centres for AI; slated to increase again next year. Being put in penalty box until they can show profitable growth. 

A core tech name. Recurring revenue. If growth doesn't materialize, the market will demand that it cut back. It just means they'll have more cashflow from its high operating margins. Strong balance sheet. Good entry point. Yield is 0.8%.

Phenomenal business, ticks every box but one. Great business economics, great management team, very strong balance sheet, amazing growth potential. Trades north of 30x, so don't chase, leg in. Wait for even more of a pullback. You'll always get your chance, as markets are volatile.