The Few Bets That Matter
Concentrated Equity Investor, AI Infrastructure
Microsoft offers massive opportunity with limited downside, much like Alphabet near $150 in mid-2025. It has everything to thrive in AI at an extremely attractive valuation. Oracle's recent bid signals the market again trusts LLM cash generation to pay contracted obligations, and Microsoft is in an easier position though still criticized on this. Technically the stock held its 200-week average and reclaimed its 50-week. CoreWeave also offers massive potential at today's price. x.com
Microsoft's position is the most crowded among the Magnificent Seven, and fund flows are against it as funds sell those stocks to reserve cash for Anthropic's IPO. It faded despite an excellent earnings report. x.com
CoreWeave's growing backlog, active power and GPU pricing make its declining shares look cheaper, though debt and customer cancellations remain risks. Blossom reports backlog rose from $99B to $129.2B, active power from 1GW to 1.5GW and GPU-offering prices by 25%. Its debt burden remains a valid concern. Unusual Whales reports Microsoft pulled out of an Nscale deal, illustrating the risk of hyperscalers leaving neocloud contracts. x.com x.com x.com
Microsoft's 50% Azure growth and prospect of positive cash flow in 2027 make the stock look bulletproof. Headcount cuts, lower Anthropic spend, a better Copilot routed to cheaper tokens, and coming proprietary chips and model usage add to the case. It should get Apple's multiple plus recognition for cybersecurity. x.com x.com
Microsoft is not cheap even after a 20% drop: it fails a strict 20% margin-of-safety valuation hurdle. x.com
Alphabet's AI capex payback is being repriced, making its post-earnings decline more than a one-day mood swing. Guidance and cloud and AI margin commentary are the near-term tests. If growth continues but the multiple compresses, the risk is duration in mega-cap AI, not a collapse in technology growth. x.com
Microsoft's salesforce and governed platform unlock AI spending at conservative firms. Faster enterprise than consumer AI adoption makes it effectively the only pure play. M365 Commercial may top 20% growth next quarter, sooner than expected on tonight's guide; GitHub resegmentation helps, but it should do so this year anyway. Azure and M365, two-thirds of revenue, should grow above 50% and 20% and may accelerate. $24-25 CY27 EPS remains achievable, implying under 22x forward earnings. x.com … Show more
Microsoft and Oracle are down and out because they are software businesses, and the market is rational to trade them like the software sector rather than like pure GPU scalers such as CoreWeave and Nebius, or Alphabet, a scaler without software exposure. Meta is an outlier with its own issues: secular uncertainty and no cash flow after capex. x.com x.com
Microsoft is a secular loser trading at a high multiple, a profile that struggles in this market. It finished red on a day the Dow rose over 1,000 points. x.com
Azure's accelerating growth and better returns per capex dollar leave further upside on the table for Microsoft, the favored hyperscaler. Azure grew 48% versus 44-45% guidance, its fifth straight beat. The stock is holding eight-week EMA support, with the blue candle still intact. x.com
Upcoming SpaceX, Anthropic and OpenAI IPOs will probably pull liquidity out of Microsoft, Meta, software stocks and tax-loss-harvesting losers. A post the author quotes argues those listings over the next few months must draw money away from junkier stocks right after a big speculative run-up, and that it may be time to size up shorts. x.com