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: 403.930
Low
500.00
Averages
631.36
High
678.00
Current: 403.930
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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- Increased Quantum Investment: Microsoft is heavily investing in its quantum computing ecosystem, introducing the Majorana 1 quantum processor aimed at enhancing computational stability and reducing errors, laying the groundwork for future commercialization.
- Data Center Expansion: The company added nearly 1 gigawatt of data center capacity in Q2 to address the challenge of Azure service demand exceeding supply, demonstrating its ongoing investment and strategic positioning in cloud infrastructure.
- Rapid AI Application Adoption: Microsoft’s Copilot user base surged over 160% year-over-year to 15 million paid users, showcasing its ability to successfully leverage AI in enterprise workflows, further driving revenue growth.
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- Market Reaction: Following Trump's announcement, Shiba Inu (SHIB) saw a 2.84% price increase, reaching a market cap of $3.3 billion, indicating a rebound in market confidence towards cryptocurrencies, particularly in light of supportive policies.
- Industry Impact: The implementation of this new policy will block anti-crypto mining legislation, alleviating potential impacts on ordinary consumers and further solidifying the Trump administration's image as crypto-friendly.
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Trump's Push for Cryptocurrency Development
- Policy Initiative: President Trump has called on major tech and AI companies to secure energy for data center operations without passing costs to consumers, creating a favorable environment for cryptocurrencies and reducing the risk of anti-crypto mining legislation.
- Market Reaction: Following Trump's announcement, the cryptocurrency market experienced a general rally, particularly benefiting meme coins like Shiba Inu, indicating a positive market response to policy support that could attract more investors to this sector.
- Corporate Participation: No fewer than seven major tech companies, including Alphabet, Microsoft, and Meta Platforms, have signed the pledge, demonstrating industry support for cryptocurrencies and reinforcing the Trump administration's image as crypto-friendly.
- Long-term Impact: This policy not only helps stabilize the cryptocurrency market but may also promote broader adoption of digital currencies, especially meme coins, enhancing their acceptance and utility among investors.
See More
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- GDP Growth Target: China has set its GDP growth target for 2026 at 4.5% to 5%, marking the lowest target on record since the early 1990s, indicating significant challenges for economic recovery amid persistent deflationary pressures and trade tensions with the U.S.
- Defense Spending Increase: Defense spending is projected to rise by 7%, the slowest increase since 2021, although analysts believe the official figures may be understated, which could impact national security and military modernization efforts.
- Data Center Attack: Amazon's data center in Bahrain was targeted by Iran for supporting the U.S. military, with damage reported from a drone strike, potentially affecting Amazon's cloud computing operations in the Middle East in the short term.
- Global Tariff Increase: U.S. Treasury Secretary announced that global tariffs will rise from 10% to 15%, with expectations that tariff rates will return to pre-Supreme Court ruling levels by August, which will have profound implications for international trade and the cost structures of U.S. businesses.
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- Attack Context: The strike was described by Iran's Islamic Revolutionary Guard Corps as retaliation for U.S. military support, reflecting escalating tensions in the Middle East that could have long-term implications for Amazon's operations.
- Service Disruption Impact: Structural damage and power outages led to elevated error rates and degraded availability for some AWS applications, prompting the company to advise customers to back up data and consider migrating workloads.
- Employee Safety Measures: Amazon has instructed all corporate employees in the Middle East to work remotely and follow local government guidelines to ensure safety, demonstrating the company's strong commitment to employee welfare.
See More
Microsoft's Long-Term Potential in Quantum Computing
- Significant Cloud Growth: In Q2 of fiscal 2026, Microsoft reported a 16.7% year-over-year revenue increase to $81.3 billion, with cloud services contributing $51.5 billion, up 26%, indicating strong market demand and sustained growth potential.
- Increased Quantum Investment: Microsoft is heavily investing in its quantum computing ecosystem, introducing the Majorana 1 quantum processor aimed at enhancing computational stability and reducing errors, laying the groundwork for future commercialization.
- Data Center Expansion: The company added nearly 1 gigawatt of data center capacity in Q2 to address the challenge of Azure service demand exceeding supply, demonstrating its ongoing investment and strategic positioning in cloud infrastructure.
- Rapid AI Application Adoption: Microsoft’s Copilot user base surged over 160% year-over-year to 15 million paid users, showcasing its ability to successfully leverage AI in enterprise workflows, further driving revenue growth.
See More
IREN Shares Drop 5% Despite Positive AI Cloud Revenue Outlook
- Stock Price Fluctuation: IREN shares fell about 5% in Wednesday's after-market session after rising nearly 13% during regular trading, indicating market divergence regarding its future performance.
- AI Cloud Revenue Forecast: The company forecasts an annualized revenue of $3.7 billion from its AI Cloud segment this year, bolstered by the purchase of 50,000 advanced gaming processing units (GPUs) from Nvidia, increasing total capacity to 150,000 units and solidifying its market position.
- Impact of Financing Plans: IREN plans to raise up to $6 billion through an at-the-market stock offering to fund its expansion, which has pressured the stock price; however, retail investors remain optimistic about the company's growth prospects.
- Retail Investor Sentiment Shift: On Stocktwits, retail investor sentiment flipped from 'bearish' to 'bullish', as traders believe the company's expansion efforts will lead to explosive growth, reflecting confidence in its investments in AI infrastructure.
See More
Trump's New Policy Boosts Cryptocurrency Market
- Policy Initiative: President Trump has called on major tech and AI companies to secure the energy needed for data center construction, requiring them to bear the full costs of energy and infrastructure, thereby creating a favorable environment for the cryptocurrency market and likely attracting more investor interest.
- Market Reaction: Following Trump's announcement, Shiba Inu (SHIB) saw a 2.84% price increase, reaching a market cap of $3.3 billion, indicating a rebound in market confidence towards cryptocurrencies, particularly in light of supportive policies.
- Industry Impact: The implementation of this new policy will block anti-crypto mining legislation, alleviating potential impacts on ordinary consumers and further solidifying the Trump administration's image as crypto-friendly.
- Future Outlook: With more major tech companies signing the pledge, we can expect additional top-down policy support for digital currencies, benefiting not only meme coins like Shiba Inu but also other more 'serious' cryptocurrencies.
See More
Trump's Push for Cryptocurrency Development
- Policy Initiative: President Trump has called on major tech and AI companies to secure energy for data center operations without passing costs to consumers, creating a favorable environment for cryptocurrencies and reducing the risk of anti-crypto mining legislation.
- Market Reaction: Following Trump's announcement, the cryptocurrency market experienced a general rally, particularly benefiting meme coins like Shiba Inu, indicating a positive market response to policy support that could attract more investors to this sector.
- Corporate Participation: No fewer than seven major tech companies, including Alphabet, Microsoft, and Meta Platforms, have signed the pledge, demonstrating industry support for cryptocurrencies and reinforcing the Trump administration's image as crypto-friendly.
- Long-term Impact: This policy not only helps stabilize the cryptocurrency market but may also promote broader adoption of digital currencies, especially meme coins, enhancing their acceptance and utility among investors.
See More
China Sets Record Low GDP Growth Target for 2026
- GDP Growth Target: China has set its GDP growth target for 2026 at 4.5% to 5%, marking the lowest target on record since the early 1990s, indicating significant challenges for economic recovery amid persistent deflationary pressures and trade tensions with the U.S.
- Defense Spending Increase: Defense spending is projected to rise by 7%, the slowest increase since 2021, although analysts believe the official figures may be understated, which could impact national security and military modernization efforts.
- Data Center Attack: Amazon's data center in Bahrain was targeted by Iran for supporting the U.S. military, with damage reported from a drone strike, potentially affecting Amazon's cloud computing operations in the Middle East in the short term.
- Global Tariff Increase: U.S. Treasury Secretary announced that global tariffs will rise from 10% to 15%, with expectations that tariff rates will return to pre-Supreme Court ruling levels by August, which will have profound implications for international trade and the cost structures of U.S. businesses.
See More
Amazon Data Centers Targeted by Iran's Military
- Data Center Damage: Amazon's data center in Bahrain was damaged due to a nearby drone strike, causing all facilities to go offline and impacting cloud computing services in the region, highlighting the direct threat of geopolitical risks to tech infrastructure.
- Attack Context: The strike was described by Iran's Islamic Revolutionary Guard Corps as retaliation for U.S. military support, reflecting escalating tensions in the Middle East that could have long-term implications for Amazon's operations.
- Service Disruption Impact: Structural damage and power outages led to elevated error rates and degraded availability for some AWS applications, prompting the company to advise customers to back up data and consider migrating workloads.
- Employee Safety Measures: Amazon has instructed all corporate employees in the Middle East to work remotely and follow local government guidelines to ensure safety, demonstrating the company's strong commitment to employee welfare.
See More
