1. Microsoft's AI revenue has exceeded $13B annually, driven by Azure AI services and Microsoft 365 Copilot; 2. Despite a 29% YoY decline in free cash flow due to increased capex for AI infrastructure, the decline is expected to be temporary; 3. Efficient AI models like DeepSeek's R1 are expected to accelerate enterprise adoption, benefiting Microsoft's top and bottom lines; 4. Microsoft's revenue mix is skewed towards enterprise spending, offering some protection from macroeconomic uncertainty; 5. The company is positioned for a 26% upside with a price target of $515.