Conviction / Hyperscalers and Platforms
MSFT
Microsoft Corporation
conviction · held at 4.7%
Microsoft's cloud business grew 43% last quarter and accelerated rather than slowed, and it now holds $678 billion of contracted work not yet delivered, which means most of what it is spending is already sold. The offset is a plan to spend $255 billion to $260 billion next year, a step up of about a third that will weigh on cash generation for years.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $488.78 |
| 30-day move | +25.7% |
| Position in 52-week range | 68 |
| From the 52-week high | -11.7% |
| Average daily volume | $21.8B |
| Weight in the book | 4.7% |
| Since last rebalance | +24.0% |
Why it is in the fund
Thesis
Azure AI + Copilot ecosystem positions Microsoft as the enterprise agentic AI platform leader.
Standing judgment
Down about 12% from the high but up 26% in thirty days, so the best entry of the quarter has already passed. At roughly 25x forward the multiple is not demanding; the FY27 capex number is what a buyer is underwriting.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 88 | +8 | Azure accelerated rather than merely held, and the contracted backlog now covers most of the spend, but the FY27 capex step up and a 26% one month run leave the entry as the unresolved leg. | Q4 FY26 reported 2026-07-29: revenue $90.0B (+18%), Azure +43% accelerating from +40% in Q3 and crossing $100B annual revenue, commercial RPO $678B (+84%), 30 million paid Copilot seats at roughly $10B run rate. Q1 FY27 Azure guided to +45% constant currency. FY27 capex guided to $255-260B, roughly |
| 2026-08-05 | 80 | flat | first v3 judgment (v2 score was uninformative, see L-001): Agent consumption is showing up in the P&L in two independently verifiable places at once, seat revenue and contracted backlog, and the capex is pre-sold rather than speculative. | Q4 FY2026: revenue ~$90B, Azure +43% and crossing $100B annual run rate, up from +40% in Q3 where AI services alone contributed ~16 points of Azure growth. 30M paid Copilot seats implying roughly a $10B run rate. Commercial RPO $678B, +84%. Q4 capex $41B, CY2026 ~$190B, FY2027 guided $255-260B. Azur |
| 2026-08-05 | 80 | -13 | first v3 judgment (v2 score was uninformative, see L-001): Agent consumption is showing up in the P&L in two independently verifiable places at once, seat revenue and contracted backlog, and the capex is pre-sold rather than speculative. | Q4 FY2026: revenue ~$90B, Azure +43% and crossing $100B annual run rate, up from +40% in Q3 where AI services alone contributed ~16 points of Azure growth. 30M paid Copilot seats implying roughly a $10B run rate. Commercial RPO $678B, +84%. Q4 capex $41B, CY2026 ~$190B, FY2027 guided $255-260B. Azur |
| 2026-07-31 | 93 | -3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-30 | 96 | +3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-29 | 93 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-28 | 93 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-27 | 93 | +5 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-26 | 88 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-25 | 89 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-24 | 89 | +4 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-23 | 85 | -3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-22 | 88 | -2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 90 | +5 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 85 | +23 | ⚠️ v2 rank-normalization artifact, unexplained move | v2 `scores` row |