Martin Bradstreet
Investor & Programmer, Former Poker Player
Microsoft is getting outworked as an infrastructure company. Its 40% Azure growth came entirely from OpenAI, which now runs on other clouds, while Anthropic runs on Google and Amazon. Amazon has Trainium, which Anthropic uses heavily, and Google has TPUs; Microsoft has no equivalent. Agentic software making Office less useful is a smaller part of the bear case. x.comÂ
AI's threat to incumbent tech makes SpaceX the preferred investment for the next decade. AI has begun taking business from Google, with Amazon and Apple next; Microsoft's 27% workforce reduction program signals desperation. x.comÂ
Alphabet may use AI-enabled Workspace and bundled pricing to win Office 365 subscribers. There is a real chance of conquest, while standalone OpenAI and Anthropic lack a competitive bundled-pricing response that could support their valuations. x.comÂ
Microsoft's hold on enterprise software and the cloud running AI makes it one of tech's best positions to own. Fiscal Q1 revenue rose 19% on Azure and the AI stack, while operating income rose 21% and net income 32%. Grade: A. x.comÂ
Google Cloud's accelerating growth positions it to lead the AI cloud market, strengthening Alphabet beyond Search. It may pass Azure next quarter, then AWS, rising from #3 to #1 in 18-24 months. Selling its Anthropic stake could fund 12-18 months of capex and buybacks, but moving roughly $300B at market price without harming their TPU and Cloud partnership is unlikely. Alphabet is cheaper than Anthropic on sales or earnings multiples; the market likely expects a 2027 capital raise. x.com x.com … Show more
Microsoft's Azure has lost its OpenAI-model access edge because those models are also on AWS and are coming to Google Cloud. Azure now has to win on price and service rather than access. x.comÂ
Microsoft's AI spending is producing faster growth with better economics: Azure accelerated to 48% on a $100B+ base while capex was $39.4B, below expectations. Management then guided Azure to 49-50% and said demand still exceeds supply, ending the debate over whether AI investment is paying off. Overweight, $625 target. x.com x.com x.comÂ
AI embedded throughout software could bring huge future token spend to Amazon and Alphabet, whose AWS and GCP clouds host software builders and offer AI platforms. Ramp data show VC-backed firms spend 10 times more per employee on AI monthly than PE-owned and other firms, a possible leading indicator of software using more tokens relative to people. VC-driven demand is vulnerable to capital-cycle swings, but longer term incumbent software may become AI-native or be replaced. x.comÂ
Microsoft's Azure has little chance against Google Cloud and AWS because the AI infrastructure race is becoming a hardware race. Amazon has Trainium and Google has TPUs, while Microsoft is still supply-constrained, so rivals can scale faster and cheaper. @DJ1P2 counters that enterprise integration, hybrid distribution and software lock-in keep Azure a dominant AI powerhouse, still growing 40%. x.com x.comÂ
Microsoft's OpenAI exposure is a very good reason to keep it alongside Anthropic exposure through Alphabet and Amazon. The prior thought of reducing or exiting Microsoft has given way to a tentative hold, with no plans to add for now. x.comÂ
Microsoft is this generation's IBM and will bleed market cap and cloud share through over-reliance on an AI lab that is, rightly, not loyal to it. Apple at least has a hardware and consumer ecosystem edge while it sits this wave out. x.comÂ
