Microsoft Corp (MSFT)

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.

It's hard to argue against Microsoft. They've earned the higher valuation. He himself started using Microsoft Office 365 instead of spending a lot more to replace his company's server, and 365 has worked seamlessly. This is why MSFT is winning cloud business. Yes, MSFT is expensive. Hold if you own it. Apple is also a good business. Them and Androids run 80% of phone software globally; Apple continues to add features which will enhance growth. There's too much hype in AI rejuvenating iPhones. People will upgrades phones anyway. True, everyone has a phone, so that growth has slowed.

Attractive for the long term. Leader in monetizing AI technology. Not a pure tech company; rather, a distribution platform for technology. Advantage and reach to take any technology and scale it up to users globally. For example, the way they took Slack and turned it into Microsoft Teams.

Excellent chart - trending towards all time highs. Very high quality company that has been performing well for years. Stock price appears to be in consolidation phase, which will trend higher in the future. 

A must-own name. Not discretionary; its productivity suite is mission-critical for home and business. Cloud computing is doing well and taking market share in a growing category. Hardware, gaming, etc. Prolific cashflow. Will be a first mover and leader in AI. Off its highs, good opportunity to add. Over time, just keeps going higher.

Owns shares in company, and has owned for years. Very good business with low debt, high quality revenues, low capital requirements, sticky products, good tech stack. Overall a great business that would recommend investing in. High amounts of free cash flow with ability to compound earnings (low dividend payout too). Only knock would be that the valuation is very high - would recommend investing at a lower price. 

He hasn't owned this in decades. He bought it in the recent tech dip. Trades near 30x PE, attractive historically. Are heavily into AI. Grows at 15-17% annually in profits and cash flow.

On March 16, 2020, MSFT lost $178 billion in market cap and has since rallied 202%, beating the S&P's 131%.

At beginning of August reported revenues were just shy, lowered guidance, so stock pulled back. 12-month price target of $490. He's adding now, and wants to get it back to a 7-8% position. Yield is 0.7%.

Rule of 40: If revenue growth rate plus profit margin = or exceeds 40%, then it's a good buying opportunity. For MSFT right now, FCF margin is ~30%, revenue growth is just shy of 16%, and that comes to 45-46%.

Still bullish, even with Mag 7 pulling back. Pullbacks are healthy, great buying opportunity. Still a 10/10 on fundamentals. Long-term upside. Cloud is growing rapidly, especially with AI demand. PC operating system has multiple, positive catalysts. Poised to benefit from acquisitions in AI and cybersecurity.

She'd still buy at these levels.