MSFT - Microsoft Corporation

Described as 'a little bit overvalued' on his scorecard.

Microsoft has negative net debt and one of the healthiest balance sheets, but also one of the largest uncommenced lease obligations (over $300B) and funding commitments tied to its OpenAI stake. Richard flags the magnitude of these future obligations without recommending action.

Named as one of the hyperscalers driving the massive AI debt issuance (~$1.3T projected) that will out-borrow the US Treasury. Prehn characterizes these firms as the most expensive, crowded names and the primary source of passive-index concentration risk, implying caution rather than a buy.

Microsoft Azure is mentioned among hyperscalers facing enterprise trust concerns for sovereign AI workloads. Potential headwind, but no explicit sell recommendation.

Strong cloud and SaaS business, Rule of 40 at 75%, Azure growth accelerating to 43%, massive $684B backlog, heavy AI capex while remaining free cash flow positive, reasonable forward PE of ~24x.

Host has bought recently but not above $500; highlights Microsoft's new MAI image model as best price/performance. New money currently prioritized toward Micron instead.

Listed among mega-cap movers, up 3.6% on the day; also named in the chapter as a 'Top AI Stock.'

Microsoft is cited as an example of a good company with a real, hard business model and a strong moat. It is grouped with Visa/Mastercard as a cash cow, though Felix warns that even good tech/AI names could face a large correction if spending gets out of hand.

Mentioned as a large-cap software opportunity: revenue still growing 18%, rebounded from its 2026 decline, and is up 7% YTD. He includes Microsoft among 'plenty of opportunities' in software.

B of A raised price target from $500 to $600; hosts say that's still not high enough and Microsoft deserves to trade above 25x because it's a proven earnings compounder doing hundreds of billions in revenue and still growing.