Microsoft Q4 Preview: Winning From AI-Led Product Supremacy (Archive)
Bullish on Microsoft’s AI-driven growth, improving margins, and upside potential versus the S&P 500.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Oracle database integration is a growth catalyst for Azure adoption and usage growth; this is likely to offset cloud optimization trends.
- AI- and Copilot-related uptakes by customers can increase recurring revenues and provide Microsoft with greater pricing power, leading to an overall improvement in revenue quality and gross margin expansion.
- An analysis of guidance vs consensus estimates, the historical track record of beats/misses and commentary suggesting faster-than-expected new product commercialization suggests there is scope for beats in Q2FY24.
- A simple and conservatively-expressed DCF valuation baking in these views suggests at least 12% further upside in the stock.
- Technical analysis also paints bullish signals with no major signs of seller pressure, indicating further outperformance of Microsoft vs S&P 500 ahead.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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