Microsoft

“Microsoft is investing heavily in AI, especially in data centers and GPUs. And that spending, well, it it's expensive.”

“If AI spending is rising this fast, but growth is slowing down, how long will it take for those huge AI investments to actually start paying off?”

“Microsoft is expanding the physical side of AI in a big way, right? It's been investing heavily in something called sovereign AI, which simply means building local data centers so countries can keep their own data and AI workloads all within the boundaries or borders of their own countries.”

“For example, in fiscal 2025, Microsoft planned to spend around $80 billion globally to expand its AI data centers.”

“Microsoft is building its own models. It's building its own chips. And it's building out sovereign AI infrastructure all over the world.”

“The more Microsoft enables sovereign AI, the more it may strengthen demand for Azure today, while also encouraging a world where customers want more independence tomorrow.”

“Microsoft also has a PEG ratio of 1.41.”

“A consensus among 49 analysts, well, they rate Microsoft a strong buy.”

“And right now, it looks like it's trying to do exactly that.”

“He said, 'This is what the market may be underestimating, which is Microsoft's bundling strategy. It isn't just a pricing tactic. It's a moat multiplier, especially when you already live inside the workflow of hundreds of millions of enterprise users like Word, Excel, Outlook, Teams, Azure or the cybersecurity business, which not a lot of people talk about.'”

“Microsoft stock is down by over 20% year-to-date, making it the second worst performer of the Magnificent 7 right after Tesla.”

“Microsoft has grown all three by about 15% in a single year.”

“DCF models like Simply Wall Street's calculate Microsoft's fair value to be around $450 per share, with some analyst price targets over $500.”

“Microsoft is anywhere from 17 to 25% undervalued, giving it anywhere from 20 to 33% upside from today's prices.”

“Now, there is an important counterpoint. Microsoft apparently pivoted its AI cell strategy after Wall Street's feedback.”

“That is exactly what Microsoft is asking for today and the market is pushing back because if capex keeps exploding while Azure growth does not blow the doors off expectations and co-pilot monetization stays debated then investors begin to worry.”

“Start with profitability. Microsoft's metrics remain elite.”

“This is not a weak business. This is a machine. And even the relationship between operating income and free cash flow tells an important story. Yes, free cash flow has not kept up one for one with operating profit because of the investment cycle, but free cash flow is still huge.”

“And Microsoft is a more diverse business. They have an application business, a security business, an infrastructure business with Azure.”

“Microsoft is preparing a 10 billion AI and cyber security investment in Japan.”

“it plans to invest $5.5 billion in Singapore.”

“Microsoft is still one of the highest quality businesses in the world.”

“I think it's becoming one of the more interesting mega cap setups in the market today.”

“the first thing that I piled money into was actually Microsoft. A big position of calls to the upside.”

“Microsoft has already been hit. At one point, this stock was down more than 24% this year.”

“The market is no longer only focused on growth. It's also focused on the quality of that growth. How much capex is required to get it? How durable are the returns?”

“Even with all the capex fears, Microsoft is still producing absolutely enormous profits. Operating profit continues to rise.”

“That's where Microsoft is reliant on OpenAI. But that contract is good through 2031.”

“one of the reasons Microsoft doesn't get the benefit of the doubt the way it used to is because the market is no longer assuming that Microsoft automatically wins every layer of the AI stack.”

“...the current value today at 424 suggests around 12% upside even before you get into a more optimistic scenario.”

“My intrinsic price of $481 per share derived from the DCF model against the current value today at 424 suggests around 12% upside...”

“But Microsoft phenomenal margins in its own right. And you can see why I have both of these companies rated as, you know, two of the best stocks you can buy right now.”

“The estimates coming out of Microsoft suggest they will spend 145 billion dollars on capital investments this year.”

“what I think for Microsoft is Microsoft wants more compute, right? We've heard from their last earnings call that they Ashure cloud service revenue did not grow as quickly because right because they had to kind of give some GPUs to their internal team and other GPUs to kind of their overall um to to their overall cloud players.”

“Our sovereign cloud solutions provides the technical, operational, and contractual foundation for sovereign-compliant AI processing.”

“OpenAI, but not just them, you know, really everybody else from Google to Microsoft to Amazon is very heavily reliant on Nvidia to build the infrastructure.”

“Now, unfortunately with Microsoft, I have this big yellow line here. This is what I would call the longerterm trend. We broke through that. I haven't taken it off or the reason why is because Microsoft is likely to come up here and want to retest areas back at the 200 day and the bottom of that long-term trend.”

“Now, Microsoft's AI head said the company is pursuing true self-sufficiency in AI by developing its own powerful models and reducing dependence on open AI. Now, this actually should be seen as a good thing because the market's been saying OpenAI is no good and anthropic is going to replace it.”

“I want to leave you with this quote from Matthew Prince. He explains that the hyperscalers, so the big cloud companies like Google, Microsoft, AWS, the hyperscalers are in the business of buying machines and renting them back.”

“EPS is $4.14 adjusted. Uh that's a beat over $3.97 expected.”

“Revenue, another beat here, uh just by about a billion dollars, 81.27 billion.”

“this week Microsoft also unveiled the second generation of its in-house processors... I think it's a really broader look at AI in itself”

“Microsoft is one of Palantir's biggest partners in bringing AI to the government.”

“Microsoft is one of Palantir's biggest partners in bringing AI to the government. Palantir might write the software but the underlying AI models they use those are running on Microsoft Azure.”

“In this partnership, Iron will provide Microsoft with access to Nvidia's GB300 GPUs at its facility in Texas.”

“Irene closed a $9.7 billion deal with Microsoft. Multi-year deep integration, infrastructure backed.”

“For example, Marll just expanded collaboration with Microsoft to provide hardware security modules for Azur cloud HSM.”