Key insights
- Analyst views recent tech earnings, particularly MSFT, as positive due to strong AI demand and monetization. MSFT's Azure growth guidance and Copilot user numbers alleviate concerns. This suggests continued strength in the AI sector and reduces near-term bubble burst risk, leading the analyst to increase positions in MSFT, XLK, and QQQ.
Although three of the four companies reported yesterday are deep in the red today (plus NVDA), I actually feel the results are positive overall. The biggest takeaway is that AI demand is robust and AI monetization is better than many have feared, which means the AI bubble (if it is a bubble) will not burst any time soon. If you're a tech investor, you should feel better / worry less after yesterday.
I was particularly impressed by MSFT results and guidance, (i) 20M paid co-pilot users (+5M q/q), and (ii) F4Q Azure growth guided to 39%-40% y/y. Heading into yesterday I was actually mostly concerned about MSFT partly due to PTSD from NOW guidance, and sold most of my MSFT positions. I'm happy I had the opportunity to buy them back today. I also added substantially to my XLK/QQQ positions.