The Magnificent 7 Are So Last Year. Cash Cows Are the New Kings.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 11 2025
0mins
Should l Buy MSFT?
Source: WSJ
Warren Buffett's Investment Strategy: The investment strategy that contributed to Warren Buffett's success as a multibillionaire is no longer effective.
Changing Market Conditions: The decline in effectiveness of this strategy is not due to the usual reasons one might expect.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 370.170
Low
500.00
Averages
631.36
High
678.00
Current: 370.170
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant Market Influence: Known for his successful predictions during the 2008 financial crisis, Burry's comments often trigger sharp trading; recently, his remarks on Fannie Mae and Freddie Mac led to a 50% surge in their shares, showcasing his market impact.
- AI Threat and Network Effect: Burry noted that while Intuit faces AI threats, its product network effect remains attractive, suggesting that certain software stocks may rebound in the current market environment, although his interest in ServiceNow's investment remains unclear.
- Tech Market Turmoil: A wave of new AI tool launches from Anthropic and concerns over overheated tech valuations have hammered software stocks, with Atlassian, Workday, and Zscaler shares dropping about 70% and 40% respectively in Q1, while Microsoft saw a 24% decline, reflecting market uncertainty.
See More
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- Negative Market Reaction: Asia-Pacific markets broadly declined after Trump's address, with major indices such as Hong Kong's Hang Seng, Japan's Nikkei 225, South Korea's Kospi, and Australia's S&P/ASX 200 all retreating, reflecting investor unease about the future situation.
- Escalating Tensions with Iran: Trump threatened that the U.S. would continue to strike Iran hard unless the Strait of Hormuz is 'open, free, and clear,' indicating a worsening relationship between the U.S. and Iran that could affect global energy supplies.
See More
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- Cash Flow Growth: Despite challenges, the company doubled its free cash flow (FCF) over the past three years, with FCF margins expanding from 31% to over 34% last year, demonstrating the resilience of its core business model.
- AI Product Launch: ServiceNow introduced its generative AI product, Now Assist, which crossed $600 million in annual contract value last year and aims for $1 billion by 2026; however, customers must upgrade to the Pro Plus tier, increasing usage costs.
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