What Microsoft's Balance Sheet Says About The Company (And AI)

Geneva Investor
1.87K Followers
(15min)

Summary

  • Inspired by Warren Buffett, I analyzed Microsoft's balance sheet, highlighting its strengths, weaknesses, and growth trends to understand its long-term potential as a stock investment.
  • Microsoft's solid financials include a current ratio of 1.37, a low debt-to-equity ratio of 0.33, and a tangible book value per share of $24.10.
  • Key trends include heavy Capex investment in AI, strong resilience and liquidity, despite investments and growing receivables indicating expanding sales.
  • I am bullish on MSFT stock, seeing at least a 50% upside in the next few years, driven by its leadership in AI and resilient business model.

France, Fort Boyard.

Microsoft's balance sheet is a fortress and reflects the same strenght of its income statement.

Philippe TURPIN/Photononstop via Getty Images

Legendary investor Warren Buffett mentioned in the past how a focus on the balance sheet, rather than on income statements, is

This article was written by

Geneva Investor
1.87K Followers
I either put my money into low cost funds or in single stocks that (I think) are asymmetric bets. My portfolio is roughly 50/50 between the two. I like to write about Macro and Fundamentals, with the (painful) awareness that Momentum and Sentiment are what really matters. That’s the reason I never try to time the market and I only buy stocks if I am willing to hold them for at least 10 years.When it comes to fundamentals, I think everybody knows the market is forward looking, but few truly understand what that means. I don’t look at a P/E number and decide to buy if a stock is “cheap”. I see markets as literally just the meeting point between demand and supply. Predicting human behavior is the key.That’s why I always try to understand what the market is seeing in a stock beyond the numbers, which often implies trying to understand sectors, industries and long term growth trends. My approach requires ingenuity, curiosity and a good dose of naivete, as well as being comfortable in (sometimes) going against the current.I am currently bullish AMD, HIMS, PLTR, TSLA, broad US equities and Bitcoin. I am based in Geneva, Switzerland (hence my SA name) and I have a Master’s Degree in Business. If you are looking for daily macro, geopolitics & investing nuggets, you can follow me on Twitter @GenevaInvestor. Friend "Rex Investing" is also a contributor to Seeking Alpha. All opinions and analysis are exclusively my own.

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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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