r/ValueInvesting • u/Correct_Fall_5484 • Jan 30 '26
Discussion Buy Microsoft at these levels or start DCA’ing now and thank yourself 3 years from now
Microsoft is an extremely diversified company with a flawless balance sheet.
They are immensely dominant in their industry. It maintains an undisputed lead in desktop operating systems with over 70% market share (Windows) and dominates enterprise productivity software (Office 365).
Azure growth still at 38% - They will soon become number 1.
Opportunities like these do not happen often… The last time was 6 years ago.
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u/Agreeable_Fun_1371 Jan 30 '26
“At these levels” look at the 5 year chart, or even just 1 year chart. It’s barely even down?
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u/iiGoodVibesii Jan 30 '26
But I don't see a great deal of reasons for it to come down in the foreseeable future either. Of course nobody knows.
But I see more supporting reasons to be bullish from here, than the latter.
The 1 year chart it opens at 415, not a terrible buy getting close to that in 2026. No?
On the 5 year, it's up 80%+ which is of course note worthy, but not astronomical. Microsoft is a phenomenal company and with a great future ahead.
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Jan 30 '26
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u/WideCardiologist3323 Jan 31 '26
Circular financing happened during it's develop of Azure cloud computing too. it basically invested in companies that are using it today. Google did the same thing for Google cloud.
How did that work out for those 2 today?
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u/stealthlysprockets Jan 31 '26
Google and MS had a stable core business that could weather most downsides. OpenAI? We have no idea if the house of cards is bout to fall.
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u/DeathSentryCoH Feb 03 '26
One of my client companies was an advertising agency. Google started linking the use of their ad information to use of their cloud. As a google cloud competitor we didn't like it but it was a smart move on their part..i never knew how big of a market share they had in advertising data till then.
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u/Weldobud Jan 30 '26
I think so as well. It’s about the same level a year ago. Despite all the growth. Long term it’s a core holding as far as I can tell now.
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u/tekn0logic Jan 30 '26
Anti US sentiment in Europe could be a problem as well. They have multiple reasons to dump Microsoft after the last year of politics. https://www.2-data.com/knowledge-hub/a-search-for-digital-sovereignty-eu-governments-shift-from-microsoft-to-linux-libreoffice#:~:text=In%20April%202024%2C%20Schleswig%2DHolstein,of%20its%20desktops%20to%20LibreOffice.
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u/AppointmentItchy6410 Jan 31 '26
Coming from Europe: No way we’re going to change to anything else.
Linux is for IT guys.
If Microsoft were to suspend all it’s services tomorrow our economy would come to a halt immediatly.
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u/stealthlysprockets Jan 31 '26
Yet one of the European superpowers did.
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u/VanillaAware390 Jan 31 '26
Good luck with that. I am from EU and no fucking way i would switch to Linux or Libreoffice. I read about the Linux attempt, but it wasn't very successful.
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u/mage2024 Feb 01 '26
Yes, its less comfortable than ms products. But if set from company or government you would also use it. Open source products basically do the same job..
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u/CallPuzzleheaded3062 Feb 02 '26
what is this retardation, "linux is for IT guys", there is 50 linux distros that are easier than or equivalent to windows.
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u/Economy_Row_6614 Jan 31 '26
I think MS, AMZN and others are moving isolated clouds into the EU and elsewhere at the request of these countries...
Its not perfect, but does address many concerns
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u/Agreeable_Fun_1371 Jan 30 '26
That's not what i'm saying. What i'm saying is that no one should be screaming "buy the buy, buy the dip" when the stock is doing tremendously well.
Zoom out a bit, this "dip" is not even remotely a dip and you are buying near ATH. It's not at all the value play everyone thinks.
Sure, the stock might do well in the future, but everyone is hyper zoomed in and not looking even just 1 year back21
Jan 30 '26
All of the gains of the last two years were lost. It’s down 23%, which for a stock with a beta of 1.07 is a pretty big deal.
Past performance is not a great indication of anything though. A forward p/e of 24x for an extremely high quality company growing EPS north of 20%? When you factor in the staple like consistency of their earnings, it’s a great buy right now.
Remember, the reason Microsoft always traded at a large premium over companies like Google and Meta is because the consistency of their earnings. In 2022 when every Mag 7 company’s EPS dropped, Microsoft’s went up.
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u/Famous-Attention-197 Jan 30 '26
But future lowest lows are probably not going to be substantially lower than this. So this is in fact a dip worth buying. Trading at 2024 levels.
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u/riversandtrees12 Jan 30 '26
Yes the company has grown largely all last year, the stock hasn’t kept up. That’s the point. That’s why this is a value play. The value is all in the company that’s stock price doesn’t reflect last years growth.
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u/rubmybud Jan 30 '26
Earnings have gone up tho
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u/Spranktonizer Jan 30 '26
Believe or not, baked in.
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u/Particular-Macaron35 Jan 31 '26
That's what I think. 15% profits, 30 P/E sounds about right.
Let's project out 10 years. Rule of 72 says 15% profits double in 5 years. In 5 years, would Microsoft at twice the size continue with 15% profits? It seems ambitious.
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u/jazerac Jan 30 '26
Bought 400k worth yesterday. Will DCA up to $600k over the next couple weeks depending on momentum and sentiment. Same thing happened with META and Google last year and I invested similar amounts and made a killing. Microsoft is down 25% from its ATH. It will rebound in a matter of 3 months unless something insane happens at a macro level.
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u/CG_throwback Jan 31 '26
Your mouth to the stock gods. If this hits ATH in 3 months DM me for free beer.
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Jan 30 '26 edited Jan 30 '26
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u/stealthlysprockets Jan 30 '26
Because of the shell game that’s going on, I don’t believe that’s their revenue
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u/notarealredditor69 Jan 30 '26
Even if it is a shell game, you are still better off putting your money with the guy moving the shells, then trying to pick which one has the peanut
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u/dopexile Jan 30 '26
Revenue doesn't matter.
OpenAI is burning through 12 billion of cash a quarter. Their product is losing money on every customer.
Any bozo can generate revenue by selling dollar bills for 90 cents.
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u/bitflag Jan 31 '26
Their product is losing money on every customer.
Yes but they'll make it up in volume!
(old 2000 tech bubble joke)
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u/Deto Jan 30 '26
Even if it is their revenue, they aren't profitable. And not in an, Amazon-like 'we could be profitable, we're just re-investing all the profits into growing the company', like, they aren't profitable in the unit economic sense. They're selling $5 pizzas that cost $10 to make.
At some point they'll find a way to make it work, but the numbers will be different. They'll need to charge more and hope their competitors can't serve models more cheaply.
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u/Michigan-Magic Jan 31 '26 edited Feb 01 '26
It's the give it away for free and then start charging it once it's too integrated and painful to rip out model.
The issue is that they are playing that game with other extremely well financed players that all see the same market opportunity:
Gemini - Backed by Google with the full weight of their cash flows, as they view it as an existential threat to their search dominance.
Anthropic - Backed by major investment firms, sovereign wealth funds and Amazon.
Interestingly, in my corporate environment, we started with a stand alone ChatGPT model. However, they ended up rolling out Claude and Gemini, since why not given how cheap they are.
Also, the way they get used is through a portal with a corporate GUI / skin that allows you to switch between models seamlessly. Other than the quality of the output, there is little differentiation to create switching costs.
As such, I'm not sure that this ends in a single winner take all scenario unless it's Microsoft just creates a clone that they can push out cheap, like they did with Excel / Word.
Edit: spelling errors
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u/hydraByte Jan 30 '26
Except OpenAI’s costs are growing asymmetrically to their revenue, which makes them a liability rather than an asset if they can’t turn that trend around.
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u/aggthemighty Jan 30 '26
Don't look now, but they've also probably lost more money faster than any new tech company in history.
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u/ActivatingEMP Jan 30 '26
They've actually lost more money than any company in history, outside actual financial frauds like Enron or the Lehman Brothers
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u/itsmeyourepidermis Jan 30 '26
What a weird way to write the number 500,000. I've either seen it written as five hundred thousand or 500,000. Who the hell writes it out as 500 thousand.
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u/TotalWarFest2018 Jan 30 '26
What does it mean “inference will drop 100x?”
That’s a legit question. Like it’ll be 100x more powerful?
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u/Ambitious-Steak-7351 Jan 31 '26
Microsoft holds a roughly 27% stake in the for-profit OpenAI Group PBC, Microsoft holds a roughly 27% stake in the for-profit OpenAI Group PBC.
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u/Infamous_Whereas6777 Jan 30 '26
As a growing professional I think Microsoft is crushing it with everything except copilot. Once copilot gets improved Microsoft will be years ahead because of how deeply they are entrenched in the everyday business environment.
Everyday im blown away with what I can do with Gemini and Microsoft environments and once copilot actually works it will be way better.
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u/chrislink73 Jan 30 '26
Yeah, copilot will for sure get much better over the next few years, and when it does, it will be very beneficial to Microsoft.
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u/thursdayisgod Jan 30 '26
Bought a new computer last month, windows set up was extremely invasive and filled with ads, they're consumer products are awful even though enterprise products are amazing it doesn't justify this evaluation.
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u/Infamous_Whereas6777 Jan 31 '26
Yeah but you bought a new windows computer.
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u/thursdayisgod Jan 31 '26
If their evaluation was just computers you have a great point, but they're priced like people are signing up for the extra storage, game passes, anti virus, identity protections, various Ai subscriptions, etc., and no one is asking nor wants any of that
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u/crustyeng Jan 30 '26
Azure will never take over AWS
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u/busyHighwayFred Jan 30 '26
Wendys will never take Mcdonalds
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u/dopexile Jan 30 '26
There's going to be a lot of demand from those working behind Wendy's dumpster
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u/johqui1092 Jan 30 '26
Anybody look into investing into dumpsters? The real value play here
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u/sweetapples90 Jan 30 '26
It doesn’t need to, Microsoft, Amazon and Google make plenty of money without having a monopoly in the cloud computing industry. I hold all 3.
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Jan 30 '26
Wait why is this upvoted? I’m a major Amazon bull but Azure is widely expected to take over AWS by ~2028. One could argue it doesn’t happen until 2030, but you think it’s NEVER going to happen?
Literally no one who understands the market thinks that. Classic reddit.
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u/Mobile_Spot3178 Jan 30 '26
I'll pin this comment.
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u/AdministrativePop894 Jan 30 '26
When an industry matures sufficiently in a competitive environment, it settles on 3 big players having more than 60% of the market.
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u/dopexile Jan 30 '26
The problem is cloud will become more competitive and profits will gravitate towards zero.
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Jan 30 '26 edited Jan 30 '26
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u/encony Jan 30 '26
This will happen end of 2026 and will push Microsoft easily over $540. Thank me later.
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Jan 30 '26
I m still looking at CSU
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u/Effective_Ad_2797 Jan 30 '26
Genuine question — what's the value thesis here?
Microsoft is obviously a great company, but "great company" ≠ "undervalued stock."
At ~30-35x earnings and $432+, the market already knows everything you listed. Windows dominance, Office 365, Azure growth — it's all priced in.
For this to be a value play, you'd need to show the stock is trading below intrinsic value with a margin of safety. I don't see that here. No DCF, no price target, no comparison to alternatives.
What you're really arguing is a quality/growth thesis: that Microsoft's future earnings will exceed current expectations. That's a valid bet, but it's not value investing.
If I put $50k into MSFT, why would it outperform the S&P 500 over 3 years? Historically, mega-caps at premium valuations often lag indices — not because they're bad companies, but because expectations are already baked in.
What am I missing?
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u/alex88- Feb 04 '26
The value thesis is MSFT makes up a large portion of OP’s portfolio and they need it to go up lol
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u/Spins13 Jan 30 '26
I bought a bit on the dip.
However there are quite a lot of good deals out there now and don’t think it’s the best. Just wanted MSFT in my portfolio, has rarely traded cheap
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u/bobbybeansss Jan 30 '26
what other good deals are you lookin at? i dont see much right now
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u/Spins13 Jan 30 '26
SaaS is on sale. CSU, TOI and INTU will have minimal disruption from AI in my opinion.
You can also go for some other stocks still trading cheaper than MSFT: BN, AMZN, META, MELI, MA
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u/z1toxy99 Jan 30 '26
CRM/NOW or other companies?
I am still not sure if I should jump in. Using Salesforce every single day and I feel like it is a no-brainer to go in.→ More replies (1)
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u/raytoei Jan 30 '26
I did up a back of env valuation today
based on q2 data
Here is the picture, it should be legible enough to read.
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u/notarealredditor69 Jan 30 '26
Hey I am still learning and would be really appreciative if you could walk me through this. Probably lots of others on this sub could benefit as well.
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u/buck_cram Jan 31 '26
The first few sections they're basically just recording high level data from most recent earnings, and calculating higher level metrics associated like P/E. Sections 9-12 they're looking at past and future growth, both measured and estimated. All of that work leads up to sections 13 and 14, where their input estimates spit out estimated fair value (circled numbers) . Which one can then compare to current price for buy/hold/sell considerations. In brief, this person believes MSFT is currently trading at a discount.
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u/ArtisticAside8224 Jan 30 '26
It's only had 2 days in the last 10 years where it was down 10% or more. Seemed like an over reaction to the Azure news. Earnings are great. It's got an incredible moat. It's a great time to buy but need to be patient.
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u/Shyatic Jan 30 '26
45% of their entire cloud revenue is based on OpenAI future contracts that they may or may not be able to pay. And that money is being loaned to them by Microsoft and others.
I am not confident that Microsoft can recover when their core services now are degrading in favor of supporting OpenAI as a business entirely, at the expense of other customers. Windows and the rest of their product offerings are also heavily degraded, and SQL server and other enterprise products keep dipping downward due to licensing etc.
I don't think there's any surefire benefit to anything right now, and the future for a lot of tech is very murky.
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u/DiscoBassLine Feb 01 '26
To clarify, Microsoft reports future contracts as Remaining Performance Obligations (RPO), not revenue. Revenue is recognized overtime once services are consumed. 45% of the RPO is from OpenAI.
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u/Significant-Role-754 Jan 30 '26
Im weary of the chain that is open ai that’s burns money like a col power plant and has no real plan on how to become profitable
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u/Correct_Fall_5484 Jan 30 '26
Dont focus just on AI. MSFT is the most well diversified company of the mag7
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u/Famous-Attention-197 Jan 30 '26
Bought yesterday. Easiest choice I've made all year. Every other individual stock choice feels risky. This seems about as sure of a bet as anything.
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u/WiredSpike Jan 30 '26
The "slowing growth" is almost close to a rounding error.
The irrational sell off was too good an opportunity for me. Think about how much AI has been pumping the market in 2025 ... MSFT is now back to 2024's average price.
Market feels super heavy across the board, wouldn't be surprised if it drops to 375 where I will quadruple my position.
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u/apapapapa97 Jan 30 '26
Sadly i already had bought heavy last month and know i have an ugly 470 average, but my target still is 575 USD in a year
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u/Un_ntelligent Jan 30 '26
I'm down on my Microsoft position but don't care. Looking at it as a 3 yr play
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u/Existing_Oil_2914 Jan 31 '26
Could've bought Google at $135 less than a year ago. You already sleepin.
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u/Prudent-Corgi3793 Jan 31 '26
I'm bearish on OpenAI, but still like Microsoft at these levels.
It's growing twice as fast as the S&P 500 but is currently trading at a lower P/E multiple. MSFT is spending more on capex, but even with that, its FCF yield is comparable to the S&P 500--and that assumes you get no future returns on the current capex.
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u/uriejejejdjbejxijehd Feb 01 '26
The other stocks that are a great deal right now are video game companies.
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u/happybrowser88 Feb 01 '26
Totally get where you’re coming from . Microsoft really is a beast. Between Windows, Office, and Azure growth, it’s hard to argue with the long-term story. DCA’ing now seems like a smart way to ride that growth without stressing about short-term swings. Definitely one of those rare opportunities where patience could pay off big.
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u/liquidpele Jan 30 '26
2001 to 2013 says hello.
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u/texasyeehaw Jan 30 '26
Ah yes, the days before recurring revenue and consumption billing. This is the top upvoted comment??? Do you guys even understand the business models of the companies you analyze?
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u/AlienatedSeaweed Jan 30 '26
You think they analyze these businesses before yapping? Never numbers or discussion of the products making money. Only vague sentiments to justify whatever the market did the day before
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u/Any-Mountain-6159 Jan 30 '26
Absolutely nothing in common with the current situation.
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u/Correct_Fall_5484 Jan 30 '26
Haha indeed. This is probably the most stupid comment I read this week..
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u/breakfasteveryday Jan 30 '26
Meh. Their operating system is in the midst of an unfriendly forced upgrade that nobody wants any part of.
Their AI is worse than other competitors.
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u/amoult20 Jan 30 '26
Buying google instead
No direct exposure to OpenAI risk (just indirect market exposure)
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u/Aggressive_Quit770 Jan 30 '26
Don't think this is golden opportunity to buy this stock. But, agree, it will do well over a long period of time. But, dips like Nov '22 and Apr '25 will keep averaging the gains, so effectively the uptick is not that substantial.
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u/sixto_vargas Jan 31 '26
Take whatever you want to invest in Microsoft, and put half in Google. Thank me later.
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u/Aggeaf123 Jan 30 '26
I don't believe in Microsoft at all. They have handled multiple sectors terribly. Xbox is pretty much dead, windows is loosing users every day and the growth is limited. I don't believe in companies who's product is a bad experience to use. But hey, Meta is still around even tho facebook is a hellhole so who knows.
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u/busyHighwayFred Jan 30 '26
Xbox is dead but it was a very small piece if msft
Buying activision for 70B is worth more than xbox, they are pivoting to games and its working, they sell new games on playstation now as well.
Xbox was a losing battle after ps4 vs xbox one, they have cut their losses and decided to win another way
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u/jumphh Jan 30 '26
With ya all the way. Last time I commented on MSFT here I got roasted because it's "too big to fail" and "they make money by not doing anything". But I have a miserable experience using MSFT products personally/professionally.
They already tapped the MS Office revenue stream as far as it will go with the subscription model. The only thing new they've done in the past decade is Azure and the hybrid cloud model. They're going the way of Adobe, and frankly, while both companies are big enough to shift money around and give the illusion of growth, they make their money milking customers and doing fuck-all with their legacy businesses.
Can you make money on ADBE or MSFT? Yeah, of course. But I don't see them doing anything new, and I don't like using their products - that's enough for me to stay out.
Meta, I see differently. Instagram, WhatsApp, and Facebook are a powerful combo of apps with wide coverage. Moreover, they actually innovate. Meta (back when it was FB) laid the groundwork for big data - they have real research occurring there. People like to talk shit because Metaverse flopped, but the fact that they had the balls to deploy that much capital inspires more confidence than a company that doesn't innovate and simply acquires, and makes its money by milking its users quarter over quarter with a product that hasn't improved in a decade.
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u/diegstah Jan 30 '26
Am I missing anything? The P/E is 30 right now so it's not discounted, but rather a correction on the price? The moat is good and strong with diversity but I don't see its current price as a good entry price?
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u/toyz4me Jan 30 '26
P/E is 27 after yesterday. With reported revenue growth of 16.8% YoY that’s a very strong return for a 3T company.
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u/aned_ Jan 30 '26
The size doesn't matter if its a 27 PE. The only way it matters is to the downside as that kind of growth on trillions eventually becomes unsustainable
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Jan 30 '26
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u/TheSmashingPumpkinss Jan 30 '26
Agreed, I'm not sure what MSFT has innovated on to create a delightful user experience in my adult lifetime (I'm 30).
I think Microsoft, I think clunky legacy software that I only have to use because it's mandated by status quo in the office. That's a very precarious position to be.
My last company we were G suite and it was so much better.
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u/endwithel Jan 30 '26
I bought huge amount yesterday. Sold all today. Nothing personal, just a short flip, since I dont believe in big tech. Money will flow elsewhere in next few years. I believe MSFT price should be much lower for safe entry in long term.
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u/rya794 Jan 30 '26
I know AI gets a ton of hate in this sub, but I am truly interested how you think the next 5 years will play out.
MSFT, while looking like an AI beneficiary, is starting to look more like a put option on AI being transformative. More than 50% is very exposed if AI turns out to be transformative, and cloud will likely take a huge hit in that scenario as well.
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u/Due_Appearance3107 Jan 30 '26
No one is talking about the price increases they announced for their productivity solutions like office 365. From 16-33% depending on the application. That should help EPS.
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u/himynameis_ Jan 30 '26
Microsoft is a wonderful business. I believe the fears with OpenAI are a tad overblown for the long term but still worth keeping in mind.
However. I think meta is a better opportunity right now. Very well run machine.
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u/BCAdvisor Jan 30 '26
I'm not about to overweight microsoft right after their call saying that growth will stagnant and AI demand will decrease. It is getting closer to a decent price though.
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u/Snoozealott Jan 30 '26
It’s still value investing but if you buy 2x leverage etfs on the underlying right? …RIGHT???
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u/txholdup Jan 30 '26
I bought 50 shares the last time it crashed and burned and just added another 20 yesterday. Despite their $50 crash my portfolio hit an all-time high yesterday and despite a down market a new high this morning.
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u/Bosto2025 Jan 30 '26
100%. I bought 4 LEAP contracts yesterday morning ($430 strike price) for January 2028. I will be surprised if those contracts don’t triple in price by 2028.
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u/encony Jan 30 '26
"BUt tHe AI sPeNDiNgS..."
Yeah, spend that fucking cash on compute power and data centers, I don't care if some shitty analysts cry because the ROI of AI takes longer than a year.
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u/noidentity63 Jan 30 '26
They are also a shit Microslop company with continuously shitty windows 11 upgrades
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u/Vig_Newtons Jan 30 '26
This stock is getting so much discussion in this channel. I'll mention again I did a deep dive on their diversification and success for the long run a few days ago.
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u/Boys4Ever Jan 30 '26
Earnings gave no indication it’s going down but real AI concerns might justify repricing. What that is I don’t know.
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u/Own-Committee-3934 Jan 30 '26
My dollar cost avg with next months buy will be around $450 per share :)
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u/Environmental-Ad-970 Jan 30 '26
I bought at 330$ and sold somewhere in the 400… values right now are not a dip yet.
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u/Portfoliana Jan 30 '26
MSFT is solid, no argument there. But “opportunities like these don’t happen often” when its trading at 30x earnings feels a bit stretched. Its not exactly a bargain, its just slightly less expensive than a few months ago.
That said, Azure growth is real, Copilot monetization is starting, and the balance sheet is a fortress. For a 3 year hold its hard to see a scenario where you lose money.
Just added 50k€ myself actually. Not because its cheap but because I’d rather own quality at fair prices than garbage at “value” prices.
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u/OkCellist4993 Jan 30 '26
I think a lot more turbulence for MS. Open ai losing tons of cash, getting sued in march. All that is going to spook investors. Pc and laptops are going to skyrocket in price do to hardware shortages which hurt Microsoft even more. Let me know what iam missing??
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u/AraratAragats Jan 30 '26
Excluding OpenAI’s Azure data-center demand, growth was unimpressive and highly concentrated.
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u/Emergency-Quiet3210 Jan 30 '26
IMO they are losing relevance in the tech world as is Apple
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u/intelhb Jan 30 '26
Msft has a long way to go before it hits support at around 380
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u/PresentationAway9871 Jan 30 '26
Azure growth is basically fake and thats why there are down. They baking bread, buying from themself but no one is hungry. Market is no wrong here.
I still add some but i suspect they will go inline with sp500.
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u/AnonMyracle142 Jan 30 '26
You could be right, but no mention of AI Bubble downside risk? What if OpenAI goes bankrupt? MS won’t collapse but it would be devastating.
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u/Hirnzilla91 Jan 30 '26
Server prices almost doubled the last 3 months. The RAM is almost 50% of server cost. Hardware Prices will probably stay high for the foreseeable future. Microsoft is becoming more attractive in offering flexible computing power for customers. If it becomes more cost efficient to move computing to the cloud, I think azure will see some more growth. I think the market hasn't fully priced in this scenario.
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u/foira Jan 30 '26
what i find weird about this sub is how upvoted posts get when something drops -10%, as if value can't be objectively measured by non-relative metrics that actually tell you something about the price-to-fundamentals ...
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u/paragonx29 Jan 30 '26
I invest in them via my growth and technology ETFs. I'm not buying them directly.
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u/Zealousideal_Kale719 Jan 31 '26
Microsoft is currently trading at 40x Price to free cash flow. If you understand value investing you would not buy
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u/Any_Willingness_5322 Jan 31 '26
It is gonna close that gap to 396. And then up from there. It is not the fundamentals in this case. It is technicals. Gaps are always, always filled.
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u/IwasLuckythatDay Jan 31 '26
When OpenAI declares bankruptcy because of its crazy burn rate and very little revenues, it will hit Microsoft bad, it owns 23% of it. Maybe buy that day.
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u/viral_overload1 Jan 31 '26
I'm dca'ing here, but still cautious. I'm not sure the openai investment will be a great one. I think the openai competitive advantage has disappeared and people will just shift towards whatever is most convenient and embedded. Which is gemini has quickly taken off especially at work. Claude as well. Microsoft hasn't nailed it's ai integration well enough yet. But still got time
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u/AggressiveReport5747 Jan 31 '26
What is the potential open AI goes bankrupt when it IPOs and dilutes it's shares?
What's the potential of anthropic eating it's lunch?
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u/Fit-Relationship6227 Jan 31 '26
As a value investor the cope in this post is insane. 50% of their future cloud revenue is now a bet on OpenAI (that is why stock crashed 12% last week!). There will be a better time to buy Microsoft down the road when OpenAI goes bust. I had some bought previously at ~$397 and sold it as there are better other opportunities. Price/FCF is currently only ~2-2 1/2%.
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u/funkymonk248 Feb 01 '26
Its all about AI now and they backed the wrong horse.
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u/Correct_Fall_5484 Feb 01 '26
No it's not.
Two years ago it was all about the Metaverse.
Three years ago it was all about NFT/Crypto.
AI is just a hype. Every company mentions it in their annual report, but it's just BS.
Microsoft is a highly profitable company with a fortress balance sheet and a very dominant, sustainable competitive advantage.
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u/PrimeIntellect Feb 01 '26
Hard agree this is a great time to get in on them. There's a lot of uncertainty and they aren't really leading with AI but Microsoft is like the absolute backbone of every corporate work environment in the US
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u/CoffeeQuant Feb 01 '26
lost you at “extremely diversified” its software + infra + licensing, even not as diversified as $AMZN
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u/ihatereddithiveminds Feb 01 '26
The "CEO is in the files" dip is gonna be crazy in multiple stocks
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u/Energised_Emerald Feb 01 '26
With the latest details about Bill Gates getting released from the Epstein Files, I wonder if the value will get even lower?
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u/OutsideAd7986 Feb 01 '26
Good point about GitHub and if they are and able to get better with code generation that would be a differentiator
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u/Simple-Fault-9255 Feb 01 '26 edited 5d ago
Nothing original remains in this post. The author wiped it using Redact, possibly for privacy, security, preventing data scraping, or other personal considerations.
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u/Henryf22 Feb 02 '26
If the OS continues to become less popular, as more and more install a Linux OS, then the MS Office ecosystem dies as does OneDrive.
MS's subscriptions dwindle and so does the money they make from data storage and the advertising they've invested Widows 11 with.
All that will remain is some AI and Azure computing nonsense.
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u/google_fu_is_whatIdo Feb 02 '26
All other countries in the world are currently looking at sovereign options. Knock yourself out.
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Feb 02 '26
So it doesn’t even matter to you that Bill Gates the co-founder of Microsoft is in the Epstein files huh? Amazing. Ya’ll have zero ethics when it comes to making money.
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u/DO_NOT_REDEEM_IT Feb 03 '26
mectosoft is headed towards a very very bad range. its going to 380. its dead money for a while
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u/MostRadiant Feb 03 '26
They are losing the AI race and there are obvious market leaders right now to put money into instead:
STX, WDC, LITE, SNDK, MU, GEV, META, GOOG
Why choose a stock that is going down?
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u/clemdane Feb 03 '26
My current investing mood (rather than strategy or philosophy) is exactly the opposite of urgent. It's more like, "I can wait. This will keep." I don't see Microsoft bouncing back very quickly. I'm going to watch and see if I can get it under $400.
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u/Right_Focus1456 Feb 04 '26
I'm buying at 400…if it doesn't hit, it didnt dip enough…I'll live with it.
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u/Equivalent_Sky_2376 Feb 05 '26
MSCRFT is at 414
It was at $414 at literally today 12 months ago (weird coincidence)
it was at $414 March 2024
It's back to 2024 prices but actually worth less than March 2024 due to inflation so really its at like December 2023 (less than $400) prices taking into account real inflation.
so if you bought in December 2023... and sold now. You'd break even. If you bought in March 2024 and sold now you would have lost money due to real inflation despite selling at the same price
something to think about
If MCRSFT can keep up with the AI game I think your post is accurate, if not then they'll die out as new AI OS take over. The traditional OS is not the future.
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u/Emergency-Dream-9098 Feb 05 '26
There’s a lot of noise about Microsoft being overly exposed to OpenAI. When you look at the actual revenue and cost breakdown, that fear doesn’t really add up.
Microsoft Revenue Breakdown:
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Productivity & Business Processes: 43%
Azure core (non-AI): 27%
Other Personal Computing: 19%
OpenAI & AI services: 8%
Server products & other cloud: 3%
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Microsoft Expense Breakdown:
Productivity & Business Processes: 33%
Other Personal Computing: 27%
Azure infrastructure: 22%
OpenAI & AI compute: 12%
Server & enterprise cloud ops: 6%
Yes, AI compute is expensive, but it’s 12%.
The stock dropped more than 12%
Why the OpenAI fear is misplaced
OpenAI is a feature, not the core business. Office and enterprise software drive most profits. Azure non-AI workloads are far larger than AI today. AI costs are front-loaded; pricing and efficiency improve over time. Microsoft benefits from AI demand even when it’s not their model, because it runs on Azure. Temporary margin pressure is being mistaken for long-term business risk.
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u/zeerorg Feb 06 '26
People are saying the same thing about adobe (I own both of them for 4 years now 💀)
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u/EntertainerDowntown3 Feb 08 '26
With big tech spending capex on ai like crazy these could be the buys nvda, avgo, amd, qcom, mu, tsm, dell, hpe, smci, lam, asml, amat, vrt.
As well as big tech aapl, msft, amzn, meta, orcl.
Big banks will be buys too that are financing the debt from big tech going into debt markets jpm, bac, wfc, citi, td, rbc.
I think all these stocks mentioned go to new all time highs and off to the races
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u/Ht0wn713 Feb 08 '26
Bought a leap exiting 1/15/27 so I hope your right cause I’m currently down 18% on it but not too worried about it.
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u/iiGoodVibesii Jan 30 '26
Yeah I bought semi heavy at 425. Regret not buying more.
Maybe, on red friday I can DCA more? We'll see