I'll play devil's advocate. Here are a few reasons not to back up the truck on MSFT:
Microsoft's PE ratio (~25) is in the high end of its range compared to the last 23 years.
https://www.macrotrends.net/stocks/charts/MSFT/microsoft/pe-ratioIf superstar CEO Nadella ever announces his exit... expect MSFT to tank.
Microsoft's acquisition-based strategy is risky, considering how the majority of mergers fail to create value. Yes, several past acquisitions have worked amazingly, but eventually the luck will run out. There's also the risk that MSFT has become more focused on absorbing acquisitions - each bought at a rich premium - and less focused on organic growth and innovation. Buying one's growth is the more expensive way to do things.
Microsoft's old Windows franchise is at risk as people continue to migrate their activities to mobile devices and cloud-based application platforms like Google's version of office or cloud-based CRM.
Microsoft's old XBox franchise could be at risk if people start using their phones or VR devices from Meta for gaming.
Microsoft Azure is a nice business, but what is its technical edge over Amazon or Google or newcomers? What makes it not a commodity?
Apple's integration of chips and software (i.e. integrating the M1 and OSX) is a stunt that, if it works, would leave Microsoft's devices far behind in terms of performance.
If Apple ever decided to compete in the corporate space, what investments would they have to make that they haven't already made? Some cloud apps, some IT department tools, some networking improvements, some app improvements, and a more rugged macbook model would seemingly put them on par with Microsoft's ecosystem. If hardware turnover could be slower - like every 4-5 years instead of every 2-3 - then Apple could be more economical. Like with touch-screen laptops, I don't know why Apple hasn't already done it. Apple would also have the opportunity to vertically integrate security services, VPN, cloud storage, cloud apps and CRM, etc. which would eliminate the corporate problem of having dozens of IT vendors who point fingers at each other when their products don't work together.
Several metrics are signalling recession, including the yield curve, 475+bp of Fed Funds Rate hikes that have never NOT preceded a recession, manufacturing data, consumer and business sentiment, the NFCI, full employment that can only go down, falling retail sales, a period of high inflation, falling residential investment, falling home prices, falling rents, falling business formation, falling international trade, falling profits for retailers and manufacturers, and even a sharply falling money supply (M2) the likes of which we've never seen. Do you really want to buy MSFT at the high range of its valuation right before a potential recession?
Yields of 7% are available in IG bonds, and 9% in high-yield. These yields could increase in the event of a financial panic this year. What will a risky bet in MSFT yield, by comparison?
