Microsoft: Superior Focus On Azure And ARPU Growth To Drive Outperformance (Archive)

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

• Microsoft's Azure, Google's GCP and Amazon's AWS make up 67% of the cloud infrastructure services market. As a mix of overall revenues, Microsoft has the highest gearing to cloud.
• This greater focus on the Cloud business can continue market share gains and strong customer adoption. Azure may be the leader in the cloud vendor market in 3–5 years.
• Copilot-driven ARPU growth can pave the way for multiple expansion as investors raise long-term growth expectations due to the sticky nature of Microsoft's enterprise productivity software.
• Cloud gross margins are a key monitorable as a higher Azure sales mix can offset some of the pricing gains in the Office 365 products.
• Relative technicals of MSFT vs S&P500 suggests a breakout of the weekly range, leading to a positive active return expectation.

Read the full article here.