What Happened to Microsoft?

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Microsoft’s (NASDAQ: MSFT) initial AI buzz, spurred by its partnership with OpenAI, has faded. Despite leading the market cap for a while, its stock performance has lagged behind Alphabet (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN). Challenges include integrating AI into its software-centric structure and dealing with copyright issues and bugs in AI products. The key to Microsoft’s future AI success may lie in effectively implementing AI into its Azure cloud platform.


So, Lee, what happened to Microsoft?

Going back a few months, they get into bed with OpenAI, which is the leader in the market.

Now, that makes Microsoft the leader in the publicly traded market.

Microsoft takes the market cap lead for all publicly traded companies.

The market goes insane.

So NVIDIA is going to be the hardware play.

Microsoft’s going to be the software play.

Forget about everybody else.

Fast forward to today, Microsoft was up 17% year to date.

At the close today, S&P 13%, but Alphabet and Amazon are running way ahead of that.

So if Microsoft was the AI darling, what’s happened?

Well, I think the initial buzz has worn off.

And that happens when there’s technology changes or new items.

But I also think that it was kind of overrated for the company as a whole in terms of, OK, how are they going to implement this into the structure of a company that is essentially a software company?

And in addition to that, I think that, again, the whole tech wave was so huge and it was kind of chasing NVIDIA with all of the AI hype that people started to realize, well, no, wait a minute.

Now they invested in this and they have $10 billion in this, which is what they keep on their money belt.

So what’s the real value long-term to Microsoft?

There are a couple other things.

They’ve now run into problems.

Sort of as the leader.

The first one is copyright.

You’ve now got every single media company, content creation company in the universe, either they’ve got a lawsuit going or Microsoft has cut, you know, some sort of deal with them to use it.

The stuff sort of copyright free, if you want to put it that way, but they’ve shot themselves in the foot with a couple of AI products and they’ve had to withdraw one or two of them.

Because, you know, they had what you and I would describe as bugs.

So I think it’s one thing to say we’re the AI leader.

It’s another thing to say we’re the leader in implementation.

Yeah, that is 100% the story.

And again, I mean, Microsoft is a tremendous company and probably getting back towards an area where you could start to nibble at it again, except, you know, up at super high levels.

But, you know, Azure is their biggest play.

Now, if they can implement it into Azure somehow, and there’s a benefit from that, an end benefit from that, maybe that’s the angle they’ll take.

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