GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Microsoft's underperformance is structural, not a dip, because it is still trying to be ten things at once. Per a post the author replies to, it hit fresh 7.5-year lows relative to the Nasdaq-100, and it couldn't catch a bid on a day the index rose 0.7%. It won't turn until it does what Mark Zuckerberg did at Meta and cuts everything down to one narrative. 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
The Nasdaq 100 is teetering ahead of earnings from Microsoft, Meta and Amazon, and more capex is unlikely to make those names rally; they will have to say something different. The next support is the $657.16 volume point of control, 4.4% below. 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's delivery delays are affecting earnings, making other sources of returns look safer now. x.com
Anthropic's S-1 and @UncleAlpha007's claim that Microsoft is growing despite a 27% headcount cut have turned the near-term tech-equity view bullish. At least a tradable rally is expected; further upside depends on Iran developments and PCE. Stay nimble. x.com x.com
Hedge funds went too lopsided short before Amazon, Microsoft and Alphabet's earnings, setting up an aggressive short-covering rally if they deliver this week, as expected. SPCX crushed and ANT's S-1 was quite good, leaving a potential two-week rally on a razor's edge. x.com
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
Microsoft is one of the only good values left in tech, while names such as Snowflake, Rubrik, Samsara and MongoDB look far too bubbly. If the stock simply returns to its highs, the gains are straightforward. x.com
Microsoft faces AI disruption that could erode its software moat and compress its high multiple. Chris Hohn, the best stock picker ever and not one to move lightly, cut Microsoft from 10% to 1% of his portfolio, about $8 billion, citing AI disruption. The question that matters is whether a business can be disrupted: when code becomes a commodity the moat erodes, and multiple compression from a high base does severe damage. x.com
