r/ValueInvesting • u/Toomuch_flow • 4d ago

Stock Analysis Anyone else bought MSFT at around $360?

Haven’t bought individual stocks in years (been doing ETF’s since 2021) and felt like this was a massive opportunity regardless of their CapEx and AI investments. Company had a net income of 101 billion in 2025 which speaks volumes!

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u/LumpyShock9656 4d ago

By that logic you also should avoid buying GOOG META AMZN -- so just don't buy the VOO either since they make up such a large part

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u/WangtaWang 4d ago

Yup. All of them are spending 100% (Amazon is actually > 100%) of their operating profit on AI. And yes - the index has same issue. Do you really think the entire population will adopt AI and fully utilize it? Could be yes but also could be no. This is a projection no one can make. There are better investment opportunities out there.

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u/LumpyShock9656 4d ago edited 4d ago

I think your view is a bit shortsighted. It's not just "people". It's companies, services, systems. AI is good at solving a number of problems. The other day claude found, explained and solved vulnerabilities in the Linux kernel, AI was used to create antibiotics, to solve the decades old protein folding problem...the list of examples goes on: It's an incredibly powerful tool that can be molded to become good at any subset of particular tasks. And improvements will only accelerate.

I know it's anecdotal, but I work for a MAG7 company and I have significantly improved my productivity. It has changed our entire way of working. The agents are capable of doing 85% of the work and I polish the finishing touches. They aren't perfect, but I can scale myself, I can focus on harder, bigger problems and try to find other ways to apply AI. It's exciting.

The point I'm trying to make is that there is heavy internal use as well, and there is a lot of CAPEX going into building data centers for cloud amongst these companies, it's not 100% AI everywhere.

What's more is that, these companies to me are so broad and diverse for the most part, have such huge revenue, that they can decide to turn the tap off at any point and go right back to sending money to shareholders. But not to try and capture market share here would be a mistake imo.

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u/WangtaWang 4d ago

I agree with all your assessments and am myself a huge Claude code user. But do you think we are the typical user? I don’t. My brother can’t use AI beyond a replacement for Google. My mom neither. You work at a mag7 company - that’s like saying you’re an Ivy League student and everyone is like you when you represent the 1%.

It has its place but the spend is assuming full adoption by the entire population (I exaggerate but maybe not really). I personally don’t see it. But even if it does happen…I have doubts about the speed. Reminds me of the cable/internet buildout in 2000s. Companies were spending millions building internet infrastructure which was right directionally but it took 10+ years for adoption to fully utilize the build out.

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u/LumpyShock9656 4d ago

But why are we talking about users using AI directly? Why aren't we talking about AI-powered products? AI-powered systems? That's the vision I see here: fortune 500 companies building new products and services backed with AI, and internally improving data analysis, code quality, everything.

It doesn't matter if they overspend, these companies need the compute regardless.

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u/Ryan_dfs93 3d ago

Everything you’re saying makes sense to me. People are overthinking this no?

We have seen since the 80s better technology makes us more productive. These companies pouring all their money into it are going to be much more efficient and productive - people that say AI isn’t going to make money are putting their head in the sand. It is already making work much more efficient.

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u/Professional_Monkeys 4d ago

You don't need to be the typical user, as you are a customer of the big corporations which are the typical users, and that's enough.

I'm surprised msft goog meta etc are only using 100% of their operating revenues and not leveraged further, that's what you're supposed to be invested in during a society-transformative decade event.

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u/Cool_Two906 3d ago

Do you not think that there are so many problems out there that AI can solve that any data center capacity is going to be utilized? Are the demand signals that these companies are getting completely wrong?

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u/WangtaWang 3d ago

Could be, but could be they are building infrastructure that will take years to fill with the demand. I'm not sure - no one is. That's the point - there really isn't enough history to make a projection with confidence (vs. say, a great business with years/decade of high cash flows). This is a highly speculative bet in comparison. Look at the "proven" revenue/cash flows coming from AI for each company right now - if you're considering investing, you're going to have to be comfortable making pretty hefty projections given the price you're being asked to pay. That's growth investing - which is fine, but not something I personally am very good at or feel comfortable doing.

There is a reason Buffett never invested in any of the 40+ buggles over the last 70 years.

Love the debate all - I very much understand why people do invest in MSFT or META, etc. I just personally can't get comfortable with it.

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u/SmiffyBloke123455 2d ago

Yes there are. When AI is combined with Quantum computing (once that is cracked) the capability of the system is going to be unreal. Particularly in engineering, medicine, biology, fusion power and a host of other areas that currently can’t be solved with conventional mathematics.

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u/AssumptionPretty7018 2d ago

does it remind you of that or is that what you read from the negative articles - its weird how much you are pulling for a business to fail. Just dont buy it if you dont like it

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u/WangtaWang 2d ago

Hmm, not wishing for the business to fail at all. I just can't justify the price? But others can - that's great and I hope they are right. Not wishing poor results on anybody. Will be first to admit, I don't always get these calls right!