00:00How do you feel having had a few minutes to take a look at some of these numbers?
00:04Yeah.
00:05That's still our top pick.
00:06Investors may have expected 39 to 40 percent.
00:10Growth in Azure.
00:10They got 38 percent.
00:13That's probably the only place where.
00:15I see people picking on it.
00:17But realistically speaking, let's not forget Microsoft doesn't.
00:20Outlook and it's a press release.
00:22So we're going to have to wait to see what the outlook is.
00:25For Azure and then most importantly, let's not forget Google.
00:30Cloud that reports next week is not going to grow 38 percent.
00:33It's more likely to grow in the low 30s.
00:35Amazon Web Services reports next week they're more likely to grow in the low.
00:4020s Azure is still winning.
00:43It just didn't quite meet those.
00:45Very, very high expectation.
00:47Well, it's an interesting point when you think about how these different names are.
00:50being treated in the stock market, Microsoft, one of the top or bottom.
00:55two worst performing names in the Magnificent Seven over the past three months.
00:58And then you make the point.
01:00in your notes that Alphabet is trading towards the high end of its historic.
01:05multiple range.
01:05So, I mean, how do you explain that when you take a look at, again, just the.
01:10treatment of these two different cloud businesses.
01:14Yeah, a lot of it's narrative.
01:15driven.
01:16Google is now not just considered a winner in AI.
01:19It's considered.
01:20the winner in AI.
01:21We'll see what they say next week.
01:23But again, realistically.
01:25speaking.
01:26Google Cloud growing slower than Azure.
01:28Google Ads growing slower than.
01:30So, the fact that Google is trading at a premium to Microsoft and Meta really.
01:35is a matter of momentum from last year from Google coming from being considered a.
01:40loser.
01:41just a few months ago is trading at 18 times earnings to being considered.
01:45the winner trading at closer to 30 times earnings on next year.
01:50So, it's swung pretty widely.
01:53We expect Microsoft.
01:55to outperform significantly this year as it gets credit for this Azure growth.
02:00So, part of what's lagged Microsoft are a couple of things.
02:03One is this anti-software narrative.
02:05This narrative that AI will replace all of software.
02:08Microsoft having such a big.
02:10software business would be part of that.
02:13We don't agree with that.
02:14Obviously.
02:15We think.
02:15that AI will get integrated into all of Microsoft products and make them better.
02:19Yeah.
02:20And the second.
02:20The second one is the open AI concern, right?
02:22Is open AI going to be able to raise capital?
02:24If it is.
02:25isn't able to raise capital.
02:26Can it continue to grow as a big engine for my.
02:30Microsoft?
02:31That's very important.
02:32So, as we look at open AI's fundraising.
02:35If they can raise 50 billion or more.
02:37Yeah.
02:38Which is being reported.
02:39Microsoft.
02:40Microsoft will be fine because Chad GPT will continue to drive growth.
02:43And again.
02:44They're growing fast.
02:45They'll do faster than google and Amazon.
02:46Yeah.
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