1. The author finds Microsoft's AI growth story compelling but questions the justification of $80B in CapEx. 2. Concerns are raised about recent data center slowdown signals, such as the dropped $12B CoreWeave extension and the $1B delayed Ohio project. 3. The author sees Microsoft's valuation as stretched, with elevated P/S and P/CF multiples compared to peers. 4. On the positive side, strong AI-driven Azure growth is noted, with AI services contributing 13 points to a 31% yoy increase in cloud revenue. 5. The author leans towards a Hold rating, citing strong fundamentals offset by valuation and signs of softening AI infrastructure demand.
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