To The Moon

It was a saga that leapt straight out of a best selling novel with all the elements of drama, deceit, suspense with the plot still unfolding, 4 days into the drama.

On Fri, 17 Nov 2023 - OpenAI board of directors announced that co-founder Sam Altman has been ousted from the CEO post.

As the scandal became viral, the calm, collected and equally suspenseful as Sam Altman also took to Twitter with his cryptic tweet of “loved his time at OpenAI” and will have “more to say about what’s next later.”

On Sat, 18 Nov 2023 even before the dismissal dusts have settled, there were already leaked news making its rounds in the rumour mills that Sam Altman has been asked to return as CEO of OpenAI.

Then on Sun, 19 Nov 2023 more rumours about an impending appointment of an incoming CEO, not Sam Altman to OpenAI.

By the time Mon, 20 Nov 2023 arrived, Microsoft CEO - Satya Nadella announced on Twitter that Sam Altman will be joining Microsoft’s AI innovation division.

At the same time, Microsoft welcomes other OpenAI staff as well.

While the OpenAI board of directors were plotting and scheming the week before, US market continued to trend upwards {in the week of 13 Nov 2023}. (see below)

Uptrend spiked on Tue, 14 Nov 2023 after US Core CPI (October 2023) continued to dip marginally. This versus Wall Street’s expectation of inflation remaining the same as previous month’s data.

The “October core CPI” good news helped to propel US market to close on a new high by Fri, 17 Nov 2023. (see above).

Unsurprisingly, US tech stocks gained “most” from the rally.

Those tech companies were:

• $Apple(AAPL)$ - +2.11% gain for week 13 Nov to 17 Nov.

• $Amazon.com(AMZN)$ - +2.18% gain for week 13 Nov to 17 Nov.

• $Meta Platforms, Inc.(META)$ - +2.66% gain for week 13 Nov to 17 Nov.

• Microsoft - +0.41% gain for week 13 Nov to 17 Nov.

• Netflix - +4.17% gain for week 13 Nov to 17 Nov.

• Google - +2.68% gain for week 13 Nov to 17 Nov.

With improved market sentiment, they have recorded consistent gains throughout the month. (see below).

Retail investors are attracted to “FAANG + Microsoft” as they are seen as safe & profitable bets in a volatile environment, in addition to other qualities like:

• Strongly quarterly earnings.

• Innovative products & services.

• Dominant market positions.

Winning stocks criteria:

• Competitive advantage.

• Growth potential.

• Profitability margins.

• Valuation levels.

• Dividend policies.

Based on above criteria, $Microsoft(MSFT)$ stands out from the crowd.

Microsoft has a diversified portfolio of products & services that cater to various market segments:

• Cloud computing with Azure.

• Gaming, with acquisition of $Activision Blizzard(ATVI)$.

• Software, its signature suite of Office365 apps.

• Hardware. Its newly minted semiconductor chip will give Nvidia a run for its profits? (see below)

• Social media.

Emerging technologies investment:

1) Artificial intelligence.

• Infusing OpenAI’s chatGPT into its suite of Office365 apps.

2) Quantum computing.

• Microsoft Quantum assembled a talented & diverse international team to create the world's first scalable quantum computing system.

3) Blockchain.

• Through partner-oriented solution approach, Microsoft partners with Aptos Labs to build A.I. tools that help banks explore blockchain integrations on Microsoft’s Azure.

Summary:

Microsoft has a:

• Loyal customer base.

• Strong brand reputation.

• Solid balance sheet.

It has consistently:

• Delivered impressive earnings results.

• Beat analysts' expectations.

• Increase its revenue & earnings per share.

• Rewarded shareholders with regular dividends & share buybacks.

Trading at a reasonable price-to-earnings (P/E) ratio of 35.86 (as of 15 Nov 2023), it is lower than some of its peers.

With Microsoft CEO’s Satya Nadella quick outreach to Sam Altman, after the OpenAI coup, it has helped to propel Microsoft ‘s to gain $63 Billion to its market capitalization since Friday’s close.

With its share price reaching US$378 per share on Mon, 20 Nov 2023 midday trading, Microsoft market cap is now at $2.81 Trillion, almost on-par with Apple Inc.

Microsoft is a company that could reach new heights in the near future.

• Do you think Microsoft is the “best” bet for a tech stock?

• Do you think Microsoft will be able to scale even higher by end 2023 and into 2024?

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