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

WDAY -14.66%
VEEV 10.18%
INTU 12.14%
PSTG -9.24%
CMG 30.19%
RDDT -3.84%
NTNX 14.13%
CRWD 71.52%
SE 19.77%
SNOW 2.45%
APPF 3.69%
PINS -38.39%

Buy List

ASML -27.09%
SEMR -42.13%
TSM -45.61%
ZETA -36.33%
GOOG -52.81%
NYAX -34.93%
MSFT -33.01%
ODD -33.41%
ASR -30.64%
FLYW -42.71%
HRMY -61.01%
GLBE -29.48%
YOU -34.88%
ABNB -36.69%
MELI -27.66%
ADBE -45.75%

Hold List

VTEX -20.00%
CELH 48.96%
TOST 14.30%
CPNG -19.28%
HIMS -22.20%
PAYC -21.97%
MNDY 6.61%
ZS 23.37%
V -8.70%
ADSK -3.90%
NOW -6.74%
FTNT -5.75%
TEAM -11.07%