How Microsoft plays both ‘offense and defense’

00:00 Speaker A

I got to talk about and bring up Microsoft here this morning and of course slumping just a little bit the broader markets are pulling back given some of the tensions in the Middle East and uh of course that naturally throws a wrench in some of the recent uh highs that we’ve bumped back up against. But for Microsoft here, what’s core to the driver that is really going to have investors swooning over this stock for for years to come?

00:36 Speaker B

Yeah, so Microsoft is offense and defense, right? In in terms of their core business is the enterprise business. That business is going to be much more resilient than a consumer business that may be impacted by any shifts in the economy or or disruptions to the economy. So that makes them the most stable of of the mega caps. But then there’s also offense. They have the fastest growing hyper scalar. Azure grew 35%. They’re growing so fast, they have to offload demand into smaller hyper scalars. They are at the center of what’s happening in AI. They have been for a couple of years. They had a little bit of a hitch towards the end of last year, the beginning of this year, but they’ve re-emerged even more victorious. So that’s why they’re the best performing uh of the mega caps and we believe they’ll continue to be the best performer.

02:04 Speaker A

Uh Joe, I only got about 30 seconds here, but as you’re thinking about Microsoft and the mega cap stocks right now, even amid some of the geopolitical tension that we’ve been tracking and and the breakout of even more conflict in the Middle East, does that make some of these mag seven stocks even more attractive as even though it is an overcrowded trade right now, it seems like that is one of the new defensive plays, if you will.

02:48 Speaker B

Yeah, Microsoft, Amazon, to a certain extent, meta, these are companies that are in very good shape, have been performing well, are more resilient, more diversified across several businesses and and have a more limited impact from the consumer than maybe some some other stocks or or cyclical stocks in the economy. So we do believe that they will uh be somewhat of a shelter to the extent that there’s even more disruption.