Buying Microsoft

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Microsoft (MSFT) reported its Q1 earnings this week. Results continued a strong run of performance from the company. Sales grew 16%, and although some of this was from the addition of Activision, we are still seeing 13-20% growth in established franchises including Office Commercial, Dynamics analytics tools, and - most notably - Azure cloud services. That's pretty darn impressive growth from a company that has been in a technology leadership position for 3 decades now.

The future continues to look bright. Microsoft is one of the few companies at the vanguard of the AI revolution, owning a key partnership with the biggest name in the space (OpenAI), one of the better and well-integrated chat implementations (Copilot), a ubiquitous suite of business tools where AI can be really helpful (Office, Dynamics), and a platform in Azure where AI-based tooling can be a major competitive advantage for customers. A lot of firms try to tout their AI efforts - Microsoft is one where it really can make a difference.

That growth is against the backdrop of what continues to be one of the strongest business profiles you'll ever find. Microsoft's economic moat, driven by rock-solid network effects and massive switching costs, is one of the widest in the world. It is led by a now-legendary CEO-visionary in Satya Nadella. It has voluminous, reliable cash flow generation and a fortress of a balance sheet. The vast majority of its revenues are recurring.

There is little not to like, and with a fair value bump up to $554, that includes Microsoft's stock price of about $410. That puts it more than 25% under the fair value target, and as such, I'm thrilled to announce the stock as our newest addition to the Buy List! Now is a good time to start or add to your position in this multi-generational tech titan.

Watch List

RDDT 7.71%
NTNX 31.52%
CRWD 63.06%
SE 29.38%
SNOW 7.59%
APPF 4.88%
PINS -23.24%

Buy List

SEMR -38.26%
TSM -38.57%
GOOG -51.98%
NYAX -58.66%
MSFT -31.00%
ODD -31.84%
ASR -28.02%
FLYW -38.06%
HRMY -54.53%
YOU -35.24%
ABNB -32.20%
MELI -29.43%
ADBE -40.48%

Hold List

VTEX -18.40%
ZETA -23.56%
CELH 34.60%
TOST 11.93%
CPNG -15.62%
HIMS -16.74%
PAYC -21.31%
MNDY 6.93%
GLBE -22.43%
ZS 27.08%
V -5.03%
ADSK -3.10%
NOW -3.65%
FTNT -5.29%
TEAM -4.39%