Microsoft Corp (MSFT)

Terrific company. Admirable performance. AI leader. Copilot application being adopted vigorously. He's always been shy of the valuation. Do your homework, but a good choice. So much choice in the sector, he's chosen other horses. 

Performance has been very strong. Excellent management team. A.I. tech very promising. Also offers many other services. Services embedded into many aspects of life. Current valuation high, but would recommend buying on weakness. 

A big holding for him. while other companies are talking about how they'll make money from gen AI, MSFT is already doing it. Their Copilot has a high level of usage by MSFT subscribers. Bears think that the latest AI rally is overdone, but if it pulls back next week, buy,

They've done well in integrating the end user into using AI. Copilot already boasts 7 million subscribers (Adobe's Firefly is another good example). Subscription revenues are crucial for companies like this, because they will feed revenue and earnings growth.

He sold CRM (a small position) to add to his MSFT shares, which is a core position.

Excellent returns YTD. Very strong business. Fundamentally ranks 10/10. Widely diverse business across the globe. Believes potential for further upside. Could be a good time to take profits. Will participate in further A.I. gains. Excellent assets. $500 billion revenue goal is achievable. Double digit revenue growth also possible.  

So much going for it, where do you start? Beat on top, bottom, and raised guidance. Flavour of the month is AI. Announced AI chip, "Athena", that's as powerful as NVDA's. Buy in thirds here around $378, $358, and around $340.

Earlier this year it broke to a new high, then fell for a while, then recently saw an uptrend that continues: a cup and handle chart. Very interesting. Not sure, but it could go a lot higher, like to $450, based on technical analysis. As a value investor, this gives him pause because its PE is high. MSFT is like a utility. Their Copilot AI is exciting though he doesn't know all the details about it; this could be a big winner for them in terms of revenue.

Margins on GOOG and MSFT cloud offerings are double digit. Very profitable, generating a lot of cashflow.

For AI exposure. Not a buy now, as it's near all-time highs. Wait for pullback. Huge installed base, so it's easy to add AI characteristics into products and then increase subscription prices. High margins, big cashflow to continue to invest in R&D.

They need no introduction. Not only a key AI play, MSFT also boasts a growing cloud business in Azure (they reiterated 2024 guidance), Office 365, LinkedIn and particularly Copilot, which is an AI add-on to Office. It is amazing, priced at $30/monthly to 78 million licensed Office users who could potentially buy it. So, revenue upside is meaningful.

Their AI platform is hailed as one of the most productive programs of our time. They will make a lot more money from AI, otherwise why would the MSFT CEO hire OpenAI founder/CEO as soon as that board fired him?

Record high in share price. Trend line is positive. Long term momentum is good. If 15% above 200 day average, might be over bought. Current strength in share price warrants caution on buying. 

Last year was an opportunity to buy one of the world's great companies at a low multiple. Strong franchises. AI has pushed shares to near all-time highs. Keeps growing market share. Core holding. Not a screaming buy today. He'd buy on dips for new clients.