Key insights
- The author argues against buying MSFT, despite its recent price decline, citing concerns about its competitive positioning in cloud computing (Azure lagging AWS and Google Cloud), AI (Copilot), and other ventures. They suggest GOOG, AMZN, and META offer more compelling value propositions due to stronger moats and leadership in key growth areas like AI and infrastructure. The author believes the hype around MSFT is unwarranted from a value investing perspective.
it genuinely seems to me that most people are buying MSFT solely because it's gone down the most and they expect a reversion to the mean. I don't doubt this will happen, but Value Investing wise, it doesn't make sense to buy primarily for this reason.
The days of it's enterprise dominance due to legacy operations is coming to an end and many of it's subsidiaries have basically lost in their respective industries (Xbox, Activision/Blizzard, Surface Devices, etc.)
Office is being replaced by Gsuite in the government. Azure is lagging Google Cloud in innovation and AWS in infrastructure and output. Not to mention Azure's recent growth isn't even that great when you consider it's boosted by one time migrations, inclusion of random online subscriptions, and a huge amount of the bookings are tied to Open AI.
Copilot lags far behind other LLMs / AI tools.
For a slightly higher valuation you can just buy Google, which is at the forefront of AI / innovation. Likewise, Amazon also offers a more compelling infrastructure play with a wider moat for a slightly higher valuation.
Even Meta makes more sense than MSFT as it's grip on social media is much tighter than Microsoft's grip in the software/hardware space.
Idk, I just don't get all the recent hype around MSFT, or clsims about how it's a must buy.
I've even see people say "Google already went up a lot so it's too late to buy", or "Amazon has lagged the last 5 years so it doesn't make sense to buy", both of which make no sense from a value investing stahd point.