Long term holder of MSFT here. To be fair I think MSFT is making a good move getting out in front of this trend and getting a big foothold in the industry. However cool the tech is I find it very hard to believe the stock run up is warranted to this level based on what I saw at build. Couple of points I think "bear" considering.
- How many employers are going to pay extra for these features is the near future? My company has blocked most things AI citing fears of client data leaks and misuse. (co-piot, bing chat)
- How big of a revenue boost will this really be? There is a lot of computational hardware in use behind the scenes. If you have power users hitting this all day how much is being kept in profit?
- Azure Open AI seems to have some good use cases, but a lot of the demonstrated cases are around chat bots. Are chat bots worth a 35X + multiplier on this 2 trillion plus stock?
My view is more that MSFT has to do this to ensure they stay in the game not that this will be a major major revenue driver. For a company this large thinking PE of 35 is a bit lofty. But then again I've been reminded by some that MR Market tends to throw fundamentals to the wind when the hype gets big and we can grow into this multiplier...it just might be a bit.
[link] [comments] https://www.reddit.com/r/stocks/comments/13vuikf/msft_is_baking_in_massive_ai_revenue_streams_is/
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