Complexity pushes Microsoft to too-hard pile
The hosts argued that Microsoft's complex AI transition and massive CapEx make it less attractive than peers like Amazon and Alphabet, which offer cleaner cloud exposure with fewer structural bear cases.
The argument
Despite Microsoft's base-case fair value aligning with its current price of ~$410, the hosts expressed concern over potential disruption to its core productivity suite and preferred to maintain exposure to cloud growth through Amazon and Alphabet.
The thesis, stress-tested
✓ What validates it
- ✓Amazon or Alphabet showing superior margin preservation relative to Microsoft
- ✓Microsoft's productivity suite revenue growth slowing due to competitive alternatives
▸ Risks discussed
- ▸Opportunity cost of holding MSFT over simpler mega-cap tech peers
- ▸Disruption of Microsoft's core productivity suite by competitors like Google or Anthropic
Hear it yourself
"tech drawdown that I think we've all still remember in 2022. And then the underperformance really only started a couple of months ago when, you know, Google started rallying and everybody's thinking of Google as, like, the big AI winner. And then Microsoft and OpenAI kind of got into the backseat. I mean, it makes sense because Microsoft was definitely, at a time, seen as the biggest winner of the AI revolution, really generally in the markets, but especially among the MAG7. But before we lose ourselves on a"
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