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Bill Ackman

Founder & CEO of Pershing Square Capital Management

15 May, 08:40Latest

Microsoft is a dominant compounder at a highly compelling valuation because investors underestimate M365's resilience and Azure's growth. At 21x forward earnings, roughly the market multiple, the price ignores its ~27% OpenAI stake worth about $200B. M365 is embedded in nearly every large enterprise, backed by hard-to-replicate security and identity infrastructure, costs about $20 a user versus over twice that for separate apps, and grew 15%. Azure grew 39%, with modest acceleration guided. x.com

MSFT

Dow Jones

30 Oct, 16:44

Real-Time Financial News Wire

30% of Azure sales and 11% of all revenue came via OpenAI. Microsoft also owns 24% of OpenAI. tradingview.com

AlvaChallengesThe reported OpenAI revenue concentration makes Azure's growth materially dependent on one counterparty, while the reported 24% ownership is below the roughly 27% assumed in the thesis.

Reuters

30 Oct, 15:33

Global News Agency

Microsoft , Alphabet , Amazon , Meta and Oracle returned 9.3% of the cash their businesses generated as dividends and buybacks in the first three quarters of the year, down from 27.4% a year earlier, a Reuters analysis of LSEG data and companies' financial reports showed. tradingview.com

AlvaChallengesThe five-company group's sharply lower cash payout ratio shows AI investment crowding out shareholder returns, making the valuation case more dependent on future earnings growth; the figures are aggregate rather than Microsoft-specific.

Kay Haigh

30 Oct, 13:44

Head and CIO of Fixed Income and Liquidity Solutions at Goldman Sachs Asset Management

Investors picked them up, but they kept coming. And at some point, I think investors figured out pretty quickly that it wasn't just a question of pricing the underlying risk, but it was much more the question of pricing capacity and balance sheet as to how much of this risk could really be digested in a short period in the market. And the result of that was spread widening. podcasts.apple.com

AlvaChallengesHaigh reports that heavy AI-related debt issuance has widened spreads as investors reach balance-sheet limits, raising the financing risk for Microsoft's continuing infrastructure buildout.

Bloomberg

30 Oct, 13:20

Business and Financial Information and News Platform

Chevron expects to power up a Microsoft data center project in West Texas on schedule despite Governor Greg Abbott’s suspension of digital infrastructure permits x.com

AlvaSupportsThe project is expected to come online on schedule, supporting the view that Azure can keep expanding despite permitting constraints.

Reuters

30 Oct, 12:00

Global News Agency

An interactive Breakingviews calculator suggests that trimming a single year from the estimated “useful life” of these AI assets would erase some $36 billion of combined net income next year from the Big Tech foursome tradingview.com

AlvaChallengesShortening AI equipment lifetimes by one year would cut combined net income at Microsoft, Alphabet, Amazon and Meta by an estimated $36 billion next year, highlighting how depreciation assumptions can affect Microsoft's earnings-based valuation.

Reuters

30 Oct, 11:47

Global News Agency

Microsoft stood out by delivering a big cash-flow beat even as it raised $25 billion through a debt sale. tradingview.com

AlvaMixedThe reported $25 billion debt raise supplements Microsoft's strong internal cash generation to fund expansion, while increasing the borrowing burden behind its AI buildout.

Silicon Data

30 Oct, 11:45

Compute-Market Data & Analytics

The LLM token index has not put in a bottom as we had previously speculated and has resumed its decline even as on-demand GPU rental indices (a signal of marginal demand and not where most of compute cost sits) continue to surge towards ATHs. x.com

AlvaMixedRenewed token-price declines pressure OpenAI's pricing power, while rising on-demand GPU rents support marginal compute demand relevant to Azure; those spot rentals represent only a limited part of overall compute costs.

sourcery

30 Oct, 01:37

Investing and Technology Newsletter and Podcast

“Then you go, ‘You know what? Do all these agents need to run? And do they need to run as frequently as you set them up to run?’” ... “And then the second thing is there are probably a whole bunch of queries that an employee needs to do leveraging AI that probably could be achieved with these free models.” ... — Jenny Johnson, CEO of Franklin Templeton x.com

AlvaChallengesJohnson warns that tighter controls on agent usage and routing simpler queries to free models could curb hyperscaler revenue, challenging how much enterprise AI adoption translates into Azure growth.

Vice President JD Vance

30 Oct, 01:25

50th Vice President of the United States

"If you’re building a data center, you have got to give back into the grid, not take out of it... ... local communities determine whether a data center goes in or not. If we follow those principles I think that we will get this right." x.com

AlvaChallengesVance's insistence on grid contributions and local control signals political conditions that could raise costs or complicate approvals for Azure's data-center expansion.

Fireside Alpha

29 Oct, 23:44

Business, Technology and Investing Interview Digest

Caterpillar CEO says ... “We’re now taking some large reciprocating orders as far out as 2029 and turbine orders into 2030... ... driven by increasing energy demand to support the data center buildout related to cloud computing and generative AI.” x.com

AlvaSupportsData-center demand is driving engine orders into 2029 and turbine orders into 2030, supporting the case that the cloud infrastructure buildout underlying Azure's growth extends well beyond the current spending cycle.

Matt Garman

29 Oct, 22:20

CEO of Amazon Web Services

@awscloud grew 39.3% YoY in Q3, our fastest growth in nearly five years. Customers want their AI running securely next to their data, where more of it runs on AWS than anywhere else. Our Core compute and storage businesses both grew at their fastest rates in several years. x.com

AlvaMixedAWS grew 39.3% year over year, its fastest rate in nearly five years, while core compute and storage also accelerated; this confirms strong AI cloud demand but shows Azure's growth is part of a broader competitive upswing.

Amazon.com, Inc.

29 Oct, 21:00

E-Commerce, Cloud Computing (AWS) and Digital Advertising Company

Customers continue to move to the cloud and scale their use of AWP for services. And increasingly, customers who want the full benefits of AI are accelerating their transition to the cloud. We see a strong linkage between AI spend and growth and our revenues for core services, and we expect that relationship to strengthen as more AI workloads move into production and drive additional demand for compute storage and networking.

AlvaSupportsAmazon reports that as AI workloads move into production, they are increasing demand for core compute, storage, and networking, supporting the broader infrastructure demand behind Azure growth.

Dow Jones

29 Oct, 21:59

Real-Time Financial News Wire

Amazon.com Chief Executive Andy Jassy says ... AWS could be generating $1 trillion a year in revenue within the next five to 10 years. tradingview.com

AlvaChallengesJassy forecasts AWS could reach $1 trillion in annual revenue within five to 10 years, highlighting the scale of a major Azure competitor and raising the bar for Microsoft's share of AI cloud growth.

Ross Pamphilon

29 Oct, 20:00

podcast

Neither OpenAI nor Anthropic, maybe Anthropic's got a stronger moat on the coding side, but neither have particularly strong moats, which is a concern, particularly given that the cost of tokens has been falling dramatically and you've got the open weight models such as DeepSeek and Kimi K3 which can sell tokens at much cheaper cost. podtrac.com

AlvaChallengesPamphilon argues that falling token prices and cheaper open-weight rivals leave OpenAI with a weak moat, challenging the durability of profits underlying Microsoft's stake value.

Dow Jones

29 Oct, 19:00

Real-Time Financial News Wire

Early Thursday morning, the world's largest software company said that it is issuing debt, split into 10 parts, according to a filing to the Securities and Exchange Commission. tradingview.com

AlvaMixedMicrosoft's SEC filing confirms the previously reported 10-part debt issuance, putting its plan to supplement internal cash generation with external financing into action.

Dow Jones

29 Oct, 17:58

Real-Time Financial News Wire

StoneX analyst Yi Fu Lee writes. ... "We are impressed by how Microsoft increasingly manages AI infrastructure capacity like an investment portfolio, allocating a scarce and fungible asset toward the highest-return opportunities while considering strategic tradeoffs," tradingview.com

AlvaSupportsAllocating shared AI capacity across products toward the highest-return opportunities supports the case that Microsoft's integrated platform can improve returns on its infrastructure investment.

Dow Jones

29 Oct, 17:59

Real-Time Financial News Wire

StoneX analyst Yi Fu Lee says ... "Microsoft has demonstrated that engineering can unlock underutilized CPU and GPU capacity, but sustaining near-50% Azure growth will eventually require delayed physical infrastructure to arrive and enter production." tradingview.com

AlvaMixedEngineering efficiency supports Azure's growth, but delayed infrastructure deliveries could constrain its ability to sustain near-50% growth.

Dow Jones

29 Oct, 17:31

Real-Time Financial News Wire

Morgan Stanley analysts say ... "The acceleration in growth continues to come with strong underlying economics," they say, noting that gross margins of 67.8% beat estimates by 60 basis points, and that operating margins were around 50% despite high AI investments. tradingview.com

AlvaSupportsStrong margins alongside accelerating growth support the thesis that Azure expansion and AI investment can sustain durable growth without eroding operating leverage.

Jenny Johnson

29 Oct, 15:12

podcast

We had a partnership with Microsoft that they were excited to do. They actually gave us free resources because it was such a sophisticated challenge and solution from a technical standpoint. ... What we've seen in the early results is 23% uplift in number of clients that one of our market leaders is visiting and an 11% uptake or increase in sales. anchor.fm

AlvaSupportsFranklin Templeton reports early gains in sales and client visits from its Microsoft partnership, strengthening the case that enterprise AI can deliver measurable returns that sustain adoption.

Libby Cantrill

29 Oct, 13:45

Managing Director and Head of Public Policy at PIMCO

I think people are underestimating how much friction there could be in this AI infrastructure build out come 2027. ... Even if they don't put a moratorium on, it just means that the cost of doing business for these hyperscalers, for these data center developers, are just going up because they're going to have to put a lot more money in these communities in order to convince them to build there. podtrac.com

AlvaChallengesThis weakens the Azure growth case: state-level political opposition could raise costs or slow data center expansion, though the extent of that friction remains uncertain.

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