Microsoft Corp (MSFT)

Down 25% this year though the QQQ is up 15% because the chip stocks have become a bigger weighting. MSFT is not executing and pivoting on a daily basis. Co-Pilot has gone from openAI to Anthropic and now Deep Seek. MSFT is still figuring it out. Co-Pilot is still not great.

We don't know their AI strategy and whether they will be disrupted. The market thinks it will.

Very much likes. The 800-pound gorilla since he was a boy ;)  Manages to morph and adapt, even when it makes a mistake (like missing the entire internet in the 1990s). Still has the bandwidth to expand and take over a sector.

It's fallen a fair bit recently over concerns of their spending and them having software in the time of AI. He doesn't expect AI to replace their software. Trades at 18x PE. It's underestimated now like Google was last year.

The lower MSFT gets, the more he likes it. The valuation keeps falling. He recently bought a position and would add to it now. If it holds, that's a very good technical signal. He loves MSFT, but consider that France will forbid the government using Microsoft Teams. That said, MSFT isn't going anywhere.

His preference is MSFT, and he'd buy today. Valuation is ~20x PE -- very fair valuation for business with good outlook for earnings growth for next 3-5 years. A bit more value than AMZN right now. Business model supports a better compounding over the long run, and generates significantly more FCF. Late to the AI race, and that's the reason for the selloff.

No issues with AMZN. Very well run, targeting new markets. You can't own all the tech companies, so you have to pick your spots.

Hurt by worries of software and of cloud growth slowing. Copilot AI project not loved. Tied itself to OpenAI, which seems to be losing a bit of steam to Gemini and Anthropic. Trading at only 22x forward PE. Better value today than in quite a while.

Is watching it. The Mag 7 isn't doing well. MSFT has been punished. He likes MSFT and has traded it before. Around $360 may be support which could be a case for it to bounce up. It's proven that the buyers will come in at $360.

There are legitimate concerns of the AI product being lesser than others, as well as the software component. Its collaboration with Open AI has caused it to fall behind others in the race. However it recently re-negotiated a deal with Open AI to explore other avenues which should open things up for Microsoft. The Azure cloud offering is growing at 40% plus, and its software offerings eg Windows, etc. are a perfect launching pad for an AI application. It is 30 % off its highs.      Buy 68  Hold 3  Sell 1

Prefers Microsoft to Meta, which are both off their highs by the same percentage. MSFT will monetize their AI faster.

Is unsure what their AI strategy is and the risk to their subscription base.

Exited 6-9 months ago. Valuation is now 1x PEG or thereabouts. Trades at 21x forward PE for 18% growth. 200-day MA started to roll over earlier this year, with stock price trending below that. High-quality name, but lots of concerns around software stocks.

Good runway to price target. A hardware and software company, but put in penalty box because of software. Well positioned for enterprise, consumer, and even government services. In his top 5 holdings.