Microsoft’s Valuation Finally Makes Sense Again transcript

Welcome back everyone. My name is Adam. I have Rizman >> Hello. >> and Victor. >> Hi everyone. >> Thanks for joining us. Today, we're going to go straight to the point. We think Microsoft is undervalued. We have that view. We have the charts. We have looked at everything. Uh and [music] Microsoft is undervalued. So, Microsoft is one of the biggest companies in the world. Um trillion multi-trillion dollar company. One of the Magnificent Seven.

Uh a beneficiary of AI, but also we see some threats from AI. So, maybe we'll talk about a bit about that briefly. But, in this video we just want to show you why we view Microsoft is undervalued. And it's like you probably won't see this uh value that often. >> Yeah. >> And we think it's an opportunity. So, why don't we just go straight into the chart and you know, why it's undervalued. >> I think if you look at the share price of Microsoft since late last year, they actually peaked around 500 and uh 500 plus, right? 500 close to 550.

And um and since then until today, the share price have dropped to as low as about two 360 thereabouts, right? And it has rebounded slightly, uh but if you compare the previous peak to the low, it actually come down around 34%. Again, now it has uh slightly rebounded, right? And the reason for the sell down largely because um first thing I think they um spending more on CapEx. >> Mhm. >> Right? Especially buying the GPUs, right?

Because there's a huge demand on AI services. Uh so, Microsoft is actually uh increasing the CapEx spending. So, that caught market by surprise. Uh and why are they concerned? Because if they look at the Copilot uh conversion, all right? So, this is the main uh thesis that uh a lot of market a lot of people are actually expecting the Copilot to deliver strong growth, right? And I think so far they only managed to convert uh about low single digit 3% of their users, all right?

Uh from their office users to uh subscribe to the Copilot. All right? I don't personally use Copilot. >> Mhm. Have you? >> Uh no, not Copilot. So, Copilot just kind of reminds me of Clippy. If [laughter] you remember If you remember Clippy. >> We are, yes. >> Yeah, but they Yeah, so now I I mean Copilot is a lot better, but I think the point is because we use AI in our work. >> Yeah. >> But you don't seem to use Copilot. >> Yes. >> You use Claude, we use ChatGPT or Gemini. >> Yes. >> So far, but this might change for Microsoft.

We'll see how that goes. Yeah. >> Yeah, so that's why I think a lot of people were under a bit disappointed by the Copilot, right? And that has been the main concern. So, when you have spent so much money on CapEx, that will drag down on your free cash flow. All right, at the same time your depreciation will go up and that might eat into your earnings. >> Mhm. >> Right? Growth especially. All right? And so, the market is like concerned that hey, you are spending so much on CapEx and yet you are not getting enough revenue coming >> The return's not not there yet.

Yeah. >> Yeah, but of [clears throat] course they do have one another business which is the Azure, right? Which is the cloud computing. I think that that business actually is doing pretty well. All right, so I think they are spending more not just because of the Copilot, right? But also largely because of the Azure and they have a lot of clients that are asking for more compute space, right? So, I think they have to spend on that, right?

Because right now I think the demand is still uh outstrip the supply that we are seeing in the market. Okay, so that's one of the main concern and I think uh is the concern that market may have overreacted. Okay, and the other concern is um why does the share price have been coming down also because of the I think earlier this year if you guys remember that is a bit of a SAS apocalypse. >> Mhm. >> Right? So, uh people were expecting that AI could potentially replace a lot of software companies.

All right? And Microsoft because they own Microsoft Office, uh I mean we use PowerPoint, right? Excel, Outlook, Teams, all right? So, so the narrative is that AI could potentially replace a lot of the workflow that we are doing on the software. All right, so nowadays you can just ask AI with a prompt and AI can do the work for you, right? So, uh moving forward I think a lot of people were expecting that they might be AI might replace a lot of jobs. >> Mhm. >> So, when AI start to kill jobs, then obviously when people lost their job, then the company may not need as many licenses for their offices, right?

That could potentially affect the demand. So, that is the one uh concern that uh the market is worrying right now. >> Mhm. >> Um and that may potentially affect not just Microsoft Office, but all the other software players. >> Yeah, and Microsoft is affected. >> It's affected because of that, right? So, the drag down, I think you could see earlier this year actually come down quite steep uh because they were dragged down by all the sell sell down. >> Yeah. >> Across the entire sales stack.

Right? And of course, there are many other reasons, but these are the two main reasons why I think Microsoft share price has been actually quite weak. >> Okay, so just to summarize, Microsoft price has come down is because of the CapEx spending has gone up. And then there's there's no even comes to the sales apocalypse, you're not sure if they can sell as many subscriptions like they did in the past. >> Yeah. >> So, I think we covered Adobe a couple of weeks back, which suffers from the same threat coming from AI.

Maybe in the future they're fewer, you know, um creative cloud subscriptions and all that. So, same thing that's happening here. But I just want to I think Adobe is a lot weaker than Microsoft. Microsoft is a very strong business. >> Yes, yes. >> Yeah, there's so many I mean, Azure business, the cloud business. They're on one hand you have Office that could be threatened by fewer subscriptions. Yeah. >> Yeah. >> But they have these they have the the cloud business, Azure, which is powering the AI revolution. >> Yeah. >> So, they I think as a whole, Microsoft is fine. >> Is it a net better in the future? >> I think it's a net yeah. >> And I think even with uh uh AI usage, I think for for you for for for someone to say that they could replace Microsoft Office, I think that is that's uh a tool here. >> Okay. >> Okay?

Uh because increasingly even you have uh clock, all right? Um they have a plug-in, MCP plug-in with the offices, all right? Uh so, when I start to use my Excel, I have actually Claude installed rather than Copilot, right? And that's been the concern why Copilot isn't doing as well as compared to Claude. And I still need the office >> Mhm. >> to get Claude to do uh clean up of the data for the Excel, for example, right?

So, I still need that subscription for the office. >> So, your base software is still going to be Excel. >> Yes. >> Word. But you just use AI to work with the base software, which is still Microsoft. >> Yeah. >> Right? >> And we're not going to cancel office because that is the our bread >> and butter, right? >> Yeah. >> So, you just the AI now can increasingly help us to uh improve our productivity. >> Okay. >> And uh so, I think the office is largely it's quite safe. >> Mhm. >> All right?

And of course, uh newer users like uh uh Gen Gen Y >> Gen Y is us. So, maybe Gen Z. >> [laughter] >> Yeah, Gen Z, right? So, um I think Gen Z users um they use a lot of Google uh product. >> Yeah. >> Right? Google Docs. Um and I think even our video is um our video leader is actually using Google Docs, right? And uh and I asked her whether she use Microsoft Office. >> Mhm. >> Uh she said she use it she she use it because we use it. >> Yes, [laughter] I remember saying that.

She's using it because we old old people are using it, yeah. >> So, that I think because of that >> It's the industry standard? >> Industry standard, yeah. So, I think um use new users have to use it, adapt to it. >> Okay. >> Yeah. >> I think it's not a concern for the Excel. >> Mhm. >> Because if they were to change it to usage token base >> Mhm. >> uh I think they're going to use more on the Excel because with especially with AI, you're going to do a lot of things much faster and you create a lot of Excel, you input a lot of data.

So, in then in the past, let's say if there's a human, right? Probably you only do maybe 10 Excel. But because with AI, you can do like 100. So, if they change from the subscription to the usage They may increase the revenue from there. So, it's just like how the like for instance like the digital uh camera actually disrupt the the normal camera, but people take more photos after that. Right? So, the usage will actually go up because of uh >> Okay. >> the AI. >> So, that may be interesting.

I don't know if Excel work can can lend itself to uh like a usage-based subscription. Definitely, you can use that for tokens and AI. One point I'll make is that you remember Zoom when COVID happened? Okay, the point I want to make is that now we're using Claude or Gemini, and no one seems to be using Copilot. But the one advantage that Microsoft has is that it has a distribution channel. Yeah. And you remember Zoom?

Zoom was the first mover in terms of video conferencing. >> Yeah. >> Not exactly the first during during the pandemic, right? And it was the first mover in the sense that in the past you need to you needed to download software to do video conferencing. It's very very legit. >> Skype, I seem to remember that. >> Skype, there was like some Citrix and something like that. It was really really troublesome to download the stuff just to do a video call online.

Zoom was the first one to say, "Here's a link. Click on it, you're in the call." >> Yeah. >> Easy. But then now you notice that a lot of people use Teams instead of Zoom. So, is Teams actually better than Zoom? I think it's about the same, right? The product. But the the advantage that Microsoft had over Zoom is that they had the distribution channel. Everyone was using Office, Windows, just use Teams. And because of that it kind of overtook Zoom in that sense. >> Yeah. >> competed with it.

So, I could see that happening with Copilot in in the future possible. >> And you know, in order for you to use Teams you also have to need this uh subscription, right? The Microsoft Office subscription. So, it's a part of their bundle, and that's how they use it to increase the stickiness of the subscription. >> I think a lot of corporates they also use Teams instead of Zoom. >> Mhm. >> All right, that's what I'm thinking. >> I mean, there's also a lot of meetings I have with external people, right?

External companies and all that. A lot of Teams links. I see a lot more Teams links than Zoom links actually. So I think that's the advantage of a incumbent like Microsoft where they can just hey, I have a similar product. Maybe it's not better but similar. But I can just like distribute it across every channel that I have. >> Yeah, another thing is that I spoke to some of the corporate companies, listed companies. One thing I realized is that they they are still using Microsoft in terms of the AI internally because they feel it's much safer at this moment because of the security. >> That's true, yeah.

Because then you're backed by this big company. You don't know if Claude maybe wrong 10 years from now. >> Yeah. >> It's It's a question mark, right? They're a little bit very successful now. It could happen. But yeah, I mean these are questions that we don't know. But I think as a whole, I think Microsoft is quite secure in its business model. >> Yeah. And actually even though that the Copilot subscriber right now is about the as of our full year as in the last 31st December 2025 was 15 million.

I think the first quarter or the recent quarter that came out it was about 20 million. I think it has gone up. I just said the market is expecting more conversion up to the Copilot. It's just And right now it's still quite low. >> Okay. >> Yeah. >> So I think the business You're still growing very fast you are, yeah. Yeah. So I think the business case for Microsoft is quite clear. Let's go into the valuation and you know, why it's undervalued.

So we we use price to cash flow for Microsoft in this case. >> Yeah. So you will look at the price to cash flow 10 years chart, all right? And I think you can see pretty clearly that the 10-year average is hovering between 32, all right? And if you draw the minus standard deviation is about 17. One standard deviation is about 27. So right now based on the current valuation, all right? Based on today closing price at the time this recording is about below 500 420 thereabouts. 420, right?

And the price to cash flow comes up to be about 18 times, all right? So we are pretty much seeing Microsoft valuation trading closer to their minus one standard deviation. Okay, which means that they are not as demanding >> Mhm. >> as compared to 2023 or even during COVID when the multiple is expanded to uh beyond 25. All right, and as high as high as 30 times. >> Yeah, so it's not often that you see this, right? >> Yeah.

So, the last time that we saw this was uh 2022 when US tech stock burst, right? And a lot uh stocks in the US uh especially tech actually crashed by 40, 50, 60. Some even crashed as much as 80%. At that time, the valuation was quite cheap as well. Uh but that was during the accelerated growth driven by the pandemic. >> Mhm. >> But after that, things have stabilized. And now we are looking at a much lower uh valuation, right?

So, uh we are looking at again uh 18 times, right? Which is even lower as compared to the one that we saw in 2022. Of course, you we might potentially see the multiple continue to contract to the level that we saw in 2016. It was below 15 times. >> Yeah. So, to give a context on the keger growth of the cash flow, so the past 5 years the cash flow have been growing about 17.5%. Past 10 years about 16.5%. So, so in short, you can say it's about 17%.

The past 15 years about 12.2%. >> Mhm. >> But you must know the Microsoft 15 years ago and now is very different the business model. So, the the the price to cash flow already re-rate upwards already. >> And I think the reason why you want to bring out uh this uh chart is that okay, we can see now it's cheap over the last 10 years. But you zoom it out, uh someone could say, "Hey, you know, this is not over 10 years." But let's say I Someone could tell you tell you, "Hey, I remember Microsoft that was like a lost decade." Where it was just kind of went sideways.

And when the valuation then was wasn't as was it as good as it was now. It was not at the multiples were not as high. Could it actually go back to that level and you know, trade at that valuation multiple? And then it's not actually under value. Now, what would you say to that? >> I think it's highly unlikely because uh back then under the Steve Ballmer, um I mean, Microsoft had a that lost decade, right? So, I think if I look at the share price performance of Microsoft from 2000 to 2014 during his uh tenure, uh the share price is actually down. >> Mhm. >> Or relatively flat.

I mean, if you compare during the 2000, of course that was the dot-com bubble burst, right? But again, during his tenure, Microsoft share price was literally down. >> Mhm. >> All right. And the multiple for price to cash flow had uh contracted from I think above 20, all right, before the way online crash. And then after that, subsequently after the crash, uh it has stayed around uh 10 times, there about. >> Okay. >> Yeah.

So, because at the time Microsoft wasn't innovating. >> Mhm. >> All right. And they have a lot of legacy product. Uh the Windows, the Office was just only for the Windows users, right? And I still remember those days, uh I don't really have a Office on my Mac. >> Cuz you use a Mac. >> Yeah. So, >> Why do you use a Mac? >> Uh nice >> [laughter] >> And the And the Mac And the Mac's so-called PowerPoint and Excel is horrible. >> Horrible.

Yeah, that's horrible. And only after the Satya Nadella took over, uh he started to focus a lot on uh cloud first, all right? And he moved um I focus actually a lot of my a lot of our investment on the Azure especially. >> Mhm. >> And today the Azure business actually has grown uh and account at least uh about a third of the business. >> Mhm. >> So, I think the the way you're saying is that the business of Microsoft has changed.

In the past, it was just Windows, Office, and pretty much a very like almost like a dinosaur kind of company. You look at Apple, Apple was innovating with iPhones and iPods and you know, stuff like that and Steve Jobs was around. And Microsoft was like a dinosaur. But in 2014, uh I I remember this. I think there was a time when Microsoft basically missed the mobile train. They missed that. They lost that to Apple. Uh and they tried they tried getting into the game with Nokia.

That was a very like short short-lived uh uh partnership with Nokia. Uh, and then Nadella was like, "You know what? We We lost in the mobile. We're going to go to cloud. This is where it's going to be." And basically it was a cloud-first business from then on. Uh, and that really changed the company because now you look at it, cloud is a business segment that's just powering our business. >> Yeah. >> Uh, and it's behind the the the revolution the AI revolution basically. >> And they were uh, early had the early advantage where they invested in OpenAI, all right?

So, I think Satya Nadella saw that. And you know when uh, ChatGPT came out, all right? So, everybody was like hailing Microsoft because they have like vision to invest into uh uh, frontier AI model like uh ChatGPT and they were the primary advantage and they secured so much uh compute space from OpenAI even in the early days. >> Okay. >> Right? And of course uh now the narrative started to change, right? Because the frontier AI model uh cloud seems to be coming up very fast.

It's a lot more powerful. Uh So, that that is something where I think generally Microsoft also has opened up. They no longer just lock lock on themselves to OpenAI, okay? They also started to work with other frontier model AI model operators out there. >> Okay. >> Uh so, Azure I think is the one that will benefit. Uh I think with the um with the increasing usage of AI nowadays uh especially with your Gemini, Gemini of course will go to Google Cloud, all right?

Um and uh when you use ChatGPT, that compute use I think ultimately Azure is going to earn quite a lot of money from that. >> Mhm. Yeah. >> So, I think if you look back to the price-to-cash-flow valuation and if you uh you base it on the long-term chart and you expect it to drop back to like the past 10 times price-to-cash-flow. >> Mhm. >> I think the probability may be low because that's why I say when you look at the chart is it's how you interpret the chart and how you link the chart with the business because you I everyone can see the same chart. >> Mhm. >> But you if you cannot link it with the business and understand why the valuation multiples are traded this way. >> Yeah. >> Then you cannot tell the story.

So in the case of Microsoft, if you're expecting them to go back like the past 10 time or below. Then it may I think it's hard. And not say it cannot. It's possible. >> Mhm. >> Unless AI really fully disrupt it, it will go to that valuation. >> Okay. >> But looking at them still at the forefront with the cloud anything on the trend. The probability of them hitting that is low. It's not totally zero but low probability.

So basing on the chart and you're looking at just now Rose mean say the price to cash flow is about 18 time, right? >> Yeah. >> And the past 5 years and 10 years they have been growing at about 17%. >> Yeah. >> Let's say they slow down 15%, 13%. It's still a decent valuation to the growth that they are getting from the cash flow. >> Mhm. >> Yeah. >> Yeah, so it's a different business. >> Yeah. >> Altogether. >> Altogether.

Microsoft then and Microsoft now is different. There's a lot more recurring revenue because if you use cloud it's a lot of a compute. >> Yeah. >> You know, recurring revenues that you can use. A lot of it is now subscription based as well. I remember Office used to be a one-time license. >> Yes. >> And now it's I'm paying a subscription. Some people don't like that but too bad, you know, it is what it >> Everything is like that now. >> It is like one day I'm going to like subscribe to my car instead of buying a car.

I don't know. >> [laughter] >> You know, that could happen, right? But yeah, so >> It is a different business. >> Yeah. >> There's a lot more recurring right now. But then of course they have threats and it's in some areas. So that's the same thing that we we are seeing with Adobe. We saw that with Google. They seem to have gone way past that. And now we're in in the middle of it for Microsoft. I think Microsoft's business case is extremely strong. >> So extremely strong. >> Yeah. >> Yeah, so some of you may ask okay, so how do you get this chart Rose mean, right?

Because this thing is keep on moving, keep on changing. And how do you know like uh few months later will the valuation still stay cheap, right? Or at what price do you think that the price will become more expensive, right? So, I mean in the in the Alpha Quadrant I think we do teach how to plot chart like this, right? So, of course nowadays you can use AI. You can try to use it. I mean we have tried many times. It takes a long time to plot it.

And the data that come out sometimes is different from the one that we put. So, if you we tested because we we can actually >> Yeah. >> pull out these charts ourselves. We have we have the financial data sources and everything. And we're going to teach you how to do that in Alpha Quadrant. So, if you're interested you can check out Alpha Quadrant dot com. But back to the charts, I just wanted to we we know we have the data for the charts.

So, we can plot them out ourselves. We tested AI to see whether they could pull out charts that were accurate to that. And so far it's not been the case. It's been a little bit >> You're not sure. >> Yeah, it's a intern. You're hiring a intern but call mistake. >> Yeah. >> need to learn how to verify it. So, I think the what we teach here is really like the raw source where do you get all these data? >> Mhm. >> And how do you find the historical share price, all right?

Once you have the historical earnings or cash flow per share and then you have a share price. All right, you can actually plot it in the Excel, all right? Of course you can use your AI to help you to plot it, all right? But we will teach you how to plot that. All right, once you know it, of course you can outsource that to AI in the future but you must know how to verify those data that you're using. >> Yeah. >> I think the important thing is not Verify is one thing.

How you interpret the chart. >> Yeah. >> You interpret you interpret I interpret differently. >> Mhm. >> Everybody look at this chart everybody I say it everyone knows it's cheap. >> Yeah. >> But how do you link it with the business that tells a story? That is the most important thing. Because numbers are dead if you can't link it with the business. >> Mhm. >> Only when you link it with the business there's a story to tell what is moving forward.

All right. So, everyone is knows it's cheap. >> Yeah, but you you also teach that in Alpha Quadrant, right? >> Yeah, that how do you That's the most important thing, how to link it with the business. >> Yeah, so you teach that in Alpha Quadrant. >> a story. >> It's not just about the charts, but someone who's looking at a chart could go, "This is really useful. I want to have a look at the chart, so that I can make a decision whether to buy or sell because I know whether it's under or overvalued." But of course you link it back to the business, which is what you also cover in Alpha Quadrant.

So this is very important. >> As much as I understand that valuation is important, that's only one part of the analysis. >> Okay. So if you're interested to find out how you can, you know, plot these charts for yourself, uh do check out alphacQuadrant.com. We teach you the entire process of how you can actually pull the data for free, and then do it in Excel, and then you can put plot your own like charts for Microsoft or whatever company that you're looking at.

Uh and then you can decide, you know, is it undervalued or overvalued, and then you can make a decision based I think this is really really useful. I say it's really useful because if you were to subscribe to Bloomberg, how much is it for annual subscription? >> 10,000 a year. >> Yeah, so there are other options on online as well. I think like White Charts and all that's like 3,000 a year and everything. >> 2,600. >> Yeah, so it's like if you want to find data like that, you really have to pay for it.

But in Alpha Quadrant, we actually teach you how you can manually do it for yourself. It's going to take a bit more time because of course you pay for it, it comes to you like instantly because you're paying for it. But if you don't want to pay for that, and you want to manually do this, there's still a way to do it right now, and we teach you how to do it. And I've Once you're familiar with the steps, I do it myself because I was like, "How do you do it?" So Victor was the one that I basically >> planned out the whole thing. >> And once you're familiar with it, it takes like 10 minutes to do.

You just have the Excel set up. The template is there. We actually provide the templates for you as well. And you just plug in the figures, and you can do a bit of massaging, and then plot your chart comes out. >> Yeah. >> So it's very very useful if you want to learn how to value, do plot valuation charts for yourself. So if you're interested, do check out alphacQuadrant.com. It's open from now till 31st May. We're opening once a year.

Uh depending on when you're watching it, it could be closed, uh but do check out alphacQuadrant.com if you're interested in that. Yeah. >> Yeah. >> Okay, so join before >> it closes, all right? Otherwise, we will see you next year. >> Next year. >> Yeah. >> Okay. So of course right now, if you look at the valuation chart for Microsoft, I think you can clearly see that it's on the cheaper end. >> Yeah. >> All right. So, this is the time where Yeah, if you like Microsoft, if you think that the market concerns are not as alarming as >> Oh, it's a temporary thing. >> Yeah, it's just a temporary issue, then you can consider, right?

So, again, we have a I have a vested interest in Microsoft, right? >> Yes, so no recommendation to buy or sell. We have a position in Microsoft. Just to declare that. Yeah. >> Yeah. Okay, so this is a very important because they also risk that Microsoft that comes with it, right? So, I think I think before the AI is uh a lot of companies have been trying to disrupt their business, right? Even Google come out with Google Docs, the Google spreadsheet.

Uh and I mean, I do use them from time to time, but my core and the base is still Office product. Right? I mean, in the past, you used to have like OpenOffice, free. Nobody use it, right? Even though Microsoft charges licensing at the time. Uh so, it didn't really take off. So, the stickiness stickiness for Microsoft product is really that it's heavily embedded into corporate workflow. >> There's a joke that goes that all the banks I find A lot of banks and financial institutions are like I like they work because of Microsoft Excel. >> [laughter] >> So, once those Excel sheets are like gone, the business falls apart.

So, that So, it's like there's no reason to actually shift to something else cuz it's a bit risky in that sense. Yeah. >> Yeah. >> And the other risk is of course their investment in OpenAI, right? So, that was the initial win for for them, right? I mean, suddenly OpenAI seems to be like >> Um >> lagging behind compared to Claude, right? So, the frontier AI model is still moving very, very fast, right? And we don't know whether OpenAI could survive that, right?

And Microsoft has quite a lot investment in this uh company, right? And also, their compute space demand coming from OpenAI is huge in Azure business, right? So, once if that ever burst, uh then that may drag down the growth potential for their Azure, right? I mean, there's nothing stopping uh the usage of AI, right? So, the demand for compute space for cloud will continue to grow. >> And I think I think we're starting to see the the the impact of AI.

You recently there was a lot of news about a lot of layoffs. >> Yeah. >> Even in Singapore. And it's because they're just cutting down the headcount because some of it is offshoring, some of it is just like we just don't need as many people. >> Yeah. >> Because we can use AI. >> Yeah. >> Right. It's a real thing. So, I actually think AI is like these companies like Microsoft. I mean, it's terrible for people who are losing their jobs, don't get me wrong. >> Yeah. >> At the same time for my companies like Microsoft which are powering this >> They will benefit. >> Yeah.

Long term. >> So, I mean, so you can if you look at Microsoft and the valuation now, it actually looks interesting. >> Yeah. >> I think the the other thing is that they are not only on OpenAI, they also do a some partnership with Claude also. >> Mhm. >> So, it's not not fully focused on >> investment in Claude as well. All right, so they are putting their money all over, right? As long as like all these OpenAI the the front-end models are using my cloud, of course the the demand will still be there. >> Yeah.

So, I think yeah, I think Microsoft is here to stay. Put it that way. And at current valuations could be very interesting. All right. So, I think we want to share with that with you because we did Adobe and that was a bit more, you know, iffy. Yeah, we're not sure whether Adobe will come out so so so fine. But Microsoft seems to be okay. But the valuation is something that we want to share in this video because we want to show you how you actually have to make decisions >> Yeah. >> based on the data that you have.

And sometimes if you don't have data, it's very hard to make that decision, but we'll show you how to do it. >> Yeah. >> You can plot your own valuation charts. >> Yeah. And of course when it comes to opportunity, you also have to compare, right? So, you you see we have done Adobe and then now you're comparing with Microsoft. So, between these two, if you ask me which one would I pick? If I only have one trial, just take Microsoft. >> Yeah.

Microsoft. >> Because that is something that is a lot more safe. >> Yeah. Safer. >> Higher probability of >> uh >> not losing >> not losing this case. [laughter] >> You might make less. I don't know. You never know. You know, but it's it's a safer safer bet. Long-term bet. >> So, actually we just want to show the difference between one distressed and one compounder. >> Yeah, so but again, all boils down to valuation.

In order to make a decision whether to to buy. >> And of course we this is session is not a deep dive on Microsoft. I think you can see by now, right? And we do have gone through I think Adam has gone through the framework the entire analysis of Microsoft. Right? And that's why we are confident enough ready to share this analysis bits here and there, right, with you. All right, and that's how we build that conviction.

All right, that we think Microsoft is right now is undervalued. >> So, the valuation with your conviction which comes from the business analysis and research that you do. >> And >> And you invest based on that. >> And of course they have the right people right now, right? So, Satya Nadella is pretty solid. I think even like Steve Ballmer actually makes so much money. He's so happy with Satya Nadella. Right now he's one of the richest man. >> Yeah, yeah. >> Even though he didn't perform a good job, but he held so much.

He's still holding so much share. >> Yeah. >> Yeah, Microsoft. >> So, you you can also be a shareholder of Microsoft if you want to. All right, so again no recommendation to buy or sell. Please do do your own due diligence. We've done our due diligence ourselves for Microsoft, which is why we're comfortable. Anyways, it's a big company, very very successful. And you just look at the valuation chart. Kind of makes sense.

Yeah, and we'll show you how you can do that for yourself in Alpha Quadrant. Do check it out alphaquadrant.com open till 31st May. Anything else you want to add for today? >> No. >> I can finally close my PowerPoint. >> [laughter] >> All right, so with that my name is Adam Khoo Swee Meng. Victor, thanks for joining us. Any questions about Microsoft, put them in the comment section. We can answer them. Please hit the like button if you like this is round table.

Again, do check out Alpha Quadrant till 31st May 2026. It only opens once a year. If you want to learn how you can analyze learn how to like basically have a grow your own portfolio of growth stocks, right? Of course valuation comes in that. We teach you how to do that for yourself as well. And of course you're using AI >> to help you with your analysis, all right? And most importantly, you need to learn the skill, how do you verify those data? >> Yeah, you can't just blindly >> Yeah. >> trust in AI. >> that's where Alpha Quotient comes in.

We just help you to teach you how to find all those data directly from the the source. >> Yeah, so you you build your own skill, and then you can trust in AI. So that's very important. All right, so do check out Alpha Quotient, alphacotient.com. And with that, I think that's pretty much it. So we'll see you again.