Microsoft Corp (MSFT)

He just added more. The market is bearish MSFT. He misjudged that MSFT would be the largest benefiary of AI, though MSFT will remain a large one, but software companies won't go out of business (i.e. NOW). He's playing the momentum in MSFT now. MSFT is okay for now. It will take a while before AI impedes what they do. Without a doubt, it's the battleground stock in the market now.

It's up 14.5% from the bottom. This is one of the most valuable companies on Earth, so no it's not a software company that will become obsolete.

The valuations of mega tech names like MSFT are much lower now than a few months ago when the tech sell-off began. Look at MSFT's relationship with OpenAI. He thinks Anthropic will be valued higher than OpenAI. 

This can be your long-term piece for infrastructure/picks & shovels, or for a platform. Leave some $$ to allocate to one of the end users -- an industrial (TT) or big US bank (JPM or Citi) or retail/logistics (WMT or COST).

Tough call. Likes it more today than back in November. Rolled over since the peak last year. Mag 7 names are suffering from a technical name -- they're "tired" ;) 

Not as sexy as a chip manufacturer. Doesn't have a specific AI product. Not cheap. Growth hasn't been stellar, so the multiple is contracting. That's indicative of a tired market. Question of how to monetize Copilot will hang over it for at least a year.

Everybody owned it. If everybody owned it, who's left to buy it when things start to go soft?

He wouldn't buy now since it is a hyper-scaler and is spending huge amounts of money this year. It is below its 200 day moving average and he sees a support level of $350. For AI investments now, look to buy the physical economy companies that support the data centres.

He recently bought it at a fine valuation. He would average down. It's like a utility--so many people and businesses depend on it. They also have the cloud business. Generates heavy free cash flow. Trades around 17x forward PE with record revenues.

Distribution platform like Copilot and the application suite will benefit from AI spending. Prolific cloud computing business. Cheap. Well run. Value exists today because investors believe all the benefits will go to the OpenAIs and ChatGPTs of the world. In reality, it will be more balanced. 

On $50B in cloud revenue last year, it was growing 31%. This year, projected to grow over 40% on even more revenue. AI continues to be a white-hot race in hyperscalers, which will continue to escalate. 

Interesting name for your diversified portfolio. Yield is 1.01%.

Believes it will continue to be the 800-pound gorilla it always has been. Massive war chest of cash to invest in AI. Not going anywhere anytime soon. Very good track record of getting on board trends one way or the other. 

Won't be back at new highs by year's end, but he'd be happy to be wrong on that.

The fear that AI will eat into software stock revenues is the reason for MSFT's weakness. But he just bought MSFT at 20x forward PE. Fears are overblown but only time can heal these stocks.

Has been hurt by the software stock sell-off (which is silly), so has been weak the last year or so. Revenue growth remains around 10% with some margin upside and continual share buybacks. 15% EPS growth and trades at 20x forward PE. MSFT isn't innovative, but they are fast followers. They already use AI.

Let's do some simple analysis. 

MSFT is roughly 5% of the S&P 500. If he wants to beat the market, how much of MSFT should he own in his portfolio? Given where the stock is today, he'd probably be about 2/3 full weight and looking to add on weakness. That's because there's a scenario where it could fall to $325-350.

Right now trading at 25x PE, and it could go to 21-22x if we get another leg down in equity markets. Loves it long term.

When it comes to the impact AI will have on it, the moat's a lot bigger around its IP than some other companies. No one's going to create another widely adopted suite like that of MSFT.