Hi YXI friends,

Microsoft has done incredibly well under Nadella. The stock price has more than 10x’ed since Nadella became the CEO in 2014.

Is the great run about to come to an end? What do we make of the stock sell off after the earnings?

In this article, we will dive into MSFT’s business fundamentals, valuation, and price technicals to answer the above questions.

Let’s begin!

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

1. The Three Pillars of Microsoft

Microsoft is organised into 3 business segments, Productivity & Business Processes, Intelligent Cloud, and More Personal Computing, in the order of their revenue sizes.

The one that gets investors most excited, Azure and Other Cloud Services Revenue, sits under Intelligent Cloud. But the broader “Microsoft Cloud”, is spread across all business segments rather than being a single standalone segment. We will go into the finer details in the upcoming sections.

2. MSFT Revenue Growth Accelerated In Q1, But Is Guided To Decelerate In Q2

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