AGT Partners on Microsoft
Thesis
Fears that AI will replace all software are overblown; Microsoft's software suite will be enabled by AI, not replaced. The company is deeply entrenched with its customers, and its ability to bundle products creates an under-appreciated moat. At a 20x PE multiple, the stock offers good value.
“While we acknowledge that AI capabilities released by companies like Anthropic and OpenAI are incredible and will only get better, we think Microsoft’s suite of productivity and business software will be further enabled by AI rather than being entirely replaced. Microsoft is deeply entrenched within its customer base, and their ability to bundle products is a moat we believe is under-appreciated. As such, we believe that at 20x PE the stock offers value.”
Key risks
- Technological disruption fears that AI could potentially replace all software.