- We had been wrong indeed, with MSFT rallying by +16.3% since November 2023 and the gap widening by +34.8% to our previous recommended entry point.
- The company reports excellent FQ2’24 earnings, with robust growth across all segments, particularly aided by the PC recovery and the growing partnership with OpenAI.
- The expanding user base, increased cross selling, and productivity gains through the use of AI have also directly contributed to MSFT’s richer profit margins, negating the temporarily impacted balance sheet.
- It is apparent that MSFT is an Alpha that one may chase at every dips, since the CEO’s brilliance and the company’s highly profitable growth may never come cheap after all.
- If anything, the Market Capitalization continues to race upwards, with it already nearly doubling to $3.06T since the November 2022 bottom of $1.6T.
We previously covered Microsoft Corporation (NASDAQ:NASDAQ:MSFT) in November 2023, discussing the Intelligent Cloud’s expanding top/ bottom lines and backlog, attributed to the robust demand for OpenAI-enabled SaaS offerings across legacy and startup companies.
Combined with the sustained cloud migration and likely to be completed ATVI deal, we had believed that its prospects might be very bright after all. However, these had also triggered the stock’s premium valuations and prices then, resulting in our cautious Buy recommendation only after a moderate pullback.
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