Microsoft Post-Earnings: A Rare Dip Play You Don't Want To Miss

Summary

• Microsoft’s revenue and earnings growth remain strong, with Azure and cloud services leading the charge, even as growth rates decelerate.
• Azure’s growth missed expectations by ~$200M due to challenges in balancing AI adoption with legacy business and capacity constraints.
• Despite a 33.4x P/E and a near 43.7x EV-to-FCF, Microsoft’s strong balance sheet and 15% YoY revenue growth, coupled with ~45% operating margins, justify its pricey valuation.
• Microsoft’s stock has been flat for 6 months, and despite concerns over slowing growth, recent dips post-Q2 may present a rare opportunity to buy at a discount.

hapabapa

Microsoft (NASDAQ:MSFT) is, in my opinion, one of the companies with the best business fundamentals in the world based on two clear reasons: exposed to favorable secular growth winds and extremely robust margins. Thanks to impeccable execution in recent years under the successful

Analyst’s Disclosure:I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.