Microsoft Corp (MSFT)

No concerns about AI for this name. Results reported recently were bang-on. Azure grew 39% YOY. Tremendous backlog and demand from corporate clients. Recent pressure is emotional, not fundamental. Add when opportunities over coming months.

Owns GOOG and AMZN, but not MSFT. All are spending at least $100B this year. It's going to be a show-me story. Investors really want to see if spending will result in future earnings. He thinks it will, but there's a bit of fogginess around that. 

Plus, markets are shifting away from mega-cap tech and putting pressure on some of these names. 

Likes a lot. Latest release saw quite strong numbers and cashflow. People were caught off guard by the capex spend. These large companies with massive cashflows are willing to spend to secure their futures in AI. An overreaction. 

Well run, wonderful business economics, great balance sheet. Valuation attractive. Very much a buy on a pullback.

For him, it's MSFT and GOOG for various reasons. Their cloud services businesses are quite strong. For MSFT, its software businesses and productivity suites are quite attractive. For GOOG, online ad business is phenomenal. The two of them generate more cashflow, and their FCF yields are quite strong.

The street's feeling that MSFT is lagging the AI race is like Alphabet a year ago when the street was saying that Google search was dead. The difference is that it's too soon to say that CEO has "lost the narrative".  MSFT shows a willingness to spend on AI.

Incredibly well run and well disciplined when it comes to capital spending. At the nexus of software, cloud, and AI. Major vendor to every major company everywhere. He forecasts earnings to rise over the next 3 years by at least 50%. Expects it to remain a double-digit grower. Embedded in everything. 

At 24x PE, a great opportunity to buy the best of the best. Yield is 0.92%.

It reported last week. They said they can't keep up with Azure demand and Co-Pilot use is disappointing. Doesn't help that MSFT is still spending a fortune on AI infrastucture. 45% of bookings comes from openAI, which the market no longer considers a reliable customer. Is down 16.5% since reporting. Though, it's more attractive at 24x PE.

Getting tarred with the software brush, but it has so many horses in the race. Used to be all software, but Azure cloud services now make a heck of a lot more $$ than the software side. Lots of partnerships. Potential of $200 to make it to price target in a year. Great opportunity.

Concerns about the software sector, and this name has a significant amount of business there. Often with the Big 7 some fall behind, and then a year later they're at the top of the pack (and something else has fallen behind). Right now, this is the laggard.

He'd start buying, as good companies don't go on sale that often. Good company, strong cashflow. At a similar multiple to S&P, but with significantly higher growth characteristics.

You can't make rational sense of market moves in the short term. Market's nitpicking about missing the "whisper" number for Azure. Come on. Short-term blip. Numbers show no evidence that things are going the wrong way; in fact, things are accelerating and improving. 

Rare to find a high-quality company like this trading below 25x PE. He expects topline and bottom line growth by double digits. Copilot's worth the extra $$. Yield is 0.85%.

They reported a top and bottom line beat, but sold hard after hours after issuing higher than expected capex while Azure numbers were only okay.

It reports this week. They last reported good numbers, but their guidance increased capex spending on AI to reverse an earlier statement that they would decrease it. So, shares fell. Also, they reported a slight decline in their Azure cloud business growth rate. He wants them to report no added spending, Azure growth, positive commentary in Co-Pilot, and their core Windows software suite isn't threatened by AI.

Lots going on with the Mag 7 right now. Both GOOG and MSFT lapped AMZN last year in terms of hyperscalers, AI, and data centres; due to AWS not growing as it used to. 

He favours MSFT as a play on data centres and quantum computing. Better that investors choose between GOOG and MSFT as better opportunities than AMZN moving forward.