1Wk·

Beginner questions about Microsoft

Microsoft is the second largest position in my ETF. A certain amount of hype about Microsoft has not escaped me here on GQ either.

But I wonder whether this is justified?

You know when people say "don't think about elephants" and you can't help but imagine an elephant?

That's how I feel about Microsoft, when I read Microsoft somewhere I always think of Windows 3.1, 95, 98 and XP.

And I think even today, they make most of their revenue from software, when there are already so many pirated products, alternative products, freeware, cost pressures and so on.

Some of the hype may be based on AI but is it healthy, most probably not.

In your opinion, is Microsoft's valuation justified given the existing core business and realistic growth rates? Could an investment in Microsoft shares actually still pay off or should we strictly stay away from them?

$MSFT (-1.04%)

3 Comments

GeldGenie@GeldGenie

1Wk

$MSFT has huge market power with Office. Companies and private users alike use it, Copilot is moving with the times, the investment in OpenAI (49% profit share, exclusive rights) could (will?) pay off massively.

For me, MSFT will remain a huge player in the future. Growth will more or less keep pace with the population and inflation. Biedes relevant values for users and pricing.

How and where MSFT expands - only time will tell.

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Nico Uhlig@RealMichaelScott

1Wk

The assumption that Microsoft makes the majority of its revenue or profit from software such as Windows is simply wrong.
Microsoft has converted many of its software services such as Office to subscription models, is the second-largest cloud provider after AWS and also has the gaming division around Xbox.

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MarTheRadi@marda304

1Wk

The license business with Windows and Office is no longer the revenue driver. Microsoft has been pursuing a cloud strategy since 2010. That's where the money is made.

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