Microsoft is undervalued despite Copilot noise
The guest argues that Microsoft is structurally positioned to win the enterprise AI transition, suggesting the stock is significantly undervalued relative to its long-term potential.
The argument
Despite near-term underwhelming performance from Copilot and noise surrounding its OpenAI partnership, Microsoft's ubiquity in enterprise software and Azure cloud infrastructure secures its long-term upside. The guest estimates the stock's fair value is closer to $550 or $600.
The thesis, stress-tested
✓ What validates it
- ✓Acceleration in Azure revenue growth in upcoming quarters
- ✓Increased enterprise adoption metrics and average revenue per user (ARPU) for Copilot
▸ Risks discussed
- ▸Slower-than-expected monetization of Copilot features
- ▸High capital expenditure on AI infrastructure weighing on margins
- ▸Potential disruption or litigation surrounding the OpenAI partnership
Hear it yourself
"You don't go on sixty minutes to, you know, to, you know, talk about a cartoon. Right? Like, the point is, like, when you go on there and you scare people like Dario did, that's that's part of the issue. Yeah. It's so fascinating because one of the things that I'm very focused on is showing people how do you connect the adoption of artificial intelligence product to you making more money. And my whole theory has been, if everyone is telling you you're going to lose your job, there's all these negative impact, then you have to look at AI as a tool."
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