Buying Microsoft
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.
Information contained on this website represents only the opinions of the author and should not be used as the sole basis for investing decisions. By using this site, you agree to all statements in the Site Policy.
Watch List
SE | 53.62% |
PINS | 2.38% |
MA | 9.82% |
CMG | 77.97% |
GOOG | 41.40% |
PSTG | 10.89% |
SEMR | -5.93% |
INTU | 26.06% |
SMAR | 24.20% |
GTLB | 35.36% |
CRWD | 64.32% |
VEEV | 11.64% |
WDAY | 8.74% |
SNOW | -6.97% |
Buy List
ODD | -29.57% |
ASR | -28.58% |
PAYC | -25.20% |
HRMY | -52.24% |
YOU | -46.20% |
Hold List
MSFT | -24.59% |
FLYW | 16.52% |
CELH | -14.72% |
TOST | 49.12% |
CPNG | 2.94% |
HIMS | -15.96% |
MNDY | 22.39% |
GLBE | -1.75% |
ZS | 22.37% |
V | -13.61% |
ADSK | 16.05% |
NOW | 41.37% |
ABNB | -21.29% |
MELI | -22.31% |
FTNT | -2.38% |
TEAM | 10.59% |
ADBE | -15.89% |