So what’s everyone’s take on $MSFT (+3,42 %) right now?

Heard today on a call that a lot of institutions are starting to add again to quality SAAS positions in names like $MSFT (+3,42 %)
$CRM (+3,65 %)
$SAP (+3,93 %) with the view that the recent bear run across enterprise software may have been overdone. I would be staying clear of companies like $ADBE (+4,35 %) but i cant help but think that $MSFT (+3,42 %) is an interesting play.

Over the last 12 to 18 months, a lot of software names have been hit pretty hard as the market rotated away from high multiple growth and towards profitability, cash flow and AI monetisation. Rising rates compressed valuations, enterprise spending slowed, and there were concerns that companies would cut back on cloud and software budgets after the huge post COVID expansion cycle.

At the same time, there’s also been a growing debate around whether AI could actually disrupt parts of the traditional software model itself, especially for smaller SAAS companies without real moats.

But when you look at names like $MSFT, it feels slightly different. You’re talking about a company with massive recurring revenues, deep enterprise integration through Office, Azure and Teams, one of the strongest balance sheets in the market, and arguably one of the best positioned companies globally for AI deployment and monetisation.

The bear case is obviously valuation and whether AI expectations have got too far ahead of themselves. But the bull case seems to be that institutions are now starting to differentiate between speculative software and genuine quality compounders with real cash flow and pricing power.

Feels like the market may have thrown out some quality names together with the weaker SAAS stories.

Polite thoughts?

Earnings season is fully underway now, and today I want to focus on what actually matters over the coming week. We’ve already had some heavy hitters reporting, most notably large banks like JPMorgan, Goldman Sachs and Citi. Overall, results were solid, with beats across the board.

One of my more recent holdings, BlackRock, also reported earlier this week. There was nothing out of the ordinary, just a strong quarter as expected, and the stock rebounded sharply, which puts my position roughly 10% in the green. The stock had been caught between private credit fears and a possible global energy crisis, but this latest report has reminded investors, once again, of the business’ strength. However, next week is where things get even more interesting for me personally.

The key question is how the so-called “SaaSpocalypse” will actually show up in the numbers. So far, even the seemingly most vulnerable platforms like Adobe are still delivering consistent growth with no real signs of weakness. Let’s see if that can continue, or if the “AI kills software” narrative survives another round.

Big names reporting next week include ServiceNow, Salesforce and SAP, all of which are deeply integrated ecosystems that keep multi-billion-dollar companies running. So as a shareholder, I wouldn’t worry too much. I actually considered adding to my already considerable ServiceNow position at $80, but before I could, the stock spiked again. Better luck next time, I guess.

Another area worth watching next week are brokers and exchanges like IBKR, CME and Nasdaq, which should give a fairly clean read on market activity. And of course, the “real” economy will be a major factor as well. Companies like General Electric, Boeing and D.R. Horton should give a better indication of how things are actually holding up, beyond what certain figures in the White House would like people to believe.

That’s the outlook for the early stages of this current earnings season. The most important reports, especially the ones I’m personally exposed to, will come later in the cycle and I’ll cover those separately.

On a more personal note, and don’t take this too seriously though, there is one company where I wouldn’t mind seeing a bad quarter, and that’s Intuitive Surgical. For a very simple reason: I want to buy it, but the valuation is still at exorbitant levels. Quite similar to Axon actually.

$JPM (-0,37 %)
$GS (-1,83 %)
$C (-0,72 %)
$BLK (-2,09 %)
$CRM (+3,65 %)
$NOW (+4,82 %)
$SAP (+3,93 %)
$IBKR (-1,67 %)
$CME (+0,73 %)
$NDAQ (-0,51 %)
$GE (-3,41 %)
$BA (-3,68 %)
$DHI (-2,47 %)
$ISRG (-1,33 %)
$AXON (+1,62 %)