Sam Boughedda

After a meeting with Seth Eisner (CFO, Cloud + AI), and Kristin Chester, Director, Cloud Revenue, Timothy Horan, an Oppenheimer analyst, reiterated his Outperform rating for Microsoft (NASDAQ:).

The analyst said Eisner and Chester asserted the Cloud as “vitally important” to Microsoft, and their tone was cautiously optimistic as they noted that despite the uncertain macro outlook, “under the central tendency, Microsoft is very well positioned” structurally.

During this time, they discussed Azure’s mission to enable the digital transformation for Microsoft’s enterprise customers.

Horan said that Microsoft’s relationships with other hyperscalers and its strong hybrid story make it a better choice than others.

The CEO stated that the management is optimistic about future growth, and didn’t suggest any slower demand. Microsoft does not believe in any economic slowdown. “Customers want core scenarios to work, and a large portfolio of interconnected services to make it easy to use,” he said.

The analyst stated that MSFT received an Outperform rating (6.5x FY23E EBITDA, 25x multiple P/E), due to its dominant platform strategy which leverages innovation, network effects and distribution. This enables robust pricing power.