I've been talking about the money
machine here on Bloomberg Technology. The money in for infrastructure and not
knowing how much money's coming out in terms of top-line growth.
Is that how you would approach earnings? Yeah.
You know, I think it's unique, and you have to look at each company
differently in this setup. Going into this week is one where I think there has
to be a hyper-focus on the unique business model of each.
So when we talk specifically about Microsoft, the thing that we know is
that capacity is below demand. So to your point, the spending is going
to be high. We expect that both in land GPUs.
But on the same token, we expect that bookings are going to be relatively
strong again this past quarter. And so we look to names like Microsoft
for continued efficiency, where they can offset some of that cost spend
through other parts of the business. The other thing that I would mention,
you know, our Kings Point team is thinks

that there's actually going to be this
transition over where the forgotten subsector of software is going to be
more part of the conversation again going forward.
So we expect that both from Microsoft and we actually really think that about
Salesforce as well. Let's focus in on Microsoft.
I think language is really important. Last quarter, Microsoft told us, Nicole,
that they had overall more than 30% top line growth for the cloud unit, and they
said 7% of that was a contribution from. Do you think that a number like that
is enough for investors to say, okay, I believe the story for all the investment
you've made, you are actually making money from this, I think.
You know, this is where we are in a pivotal moment in evaluation.
And so when you think about where exactly is going to take us five years
from now, nobody knows the answer on that.
What you're listening for is when can I

expect any glimmer of return on invested
capital that's going to work today? And so you've seen that play out in the
last few weeks, where you really did have to right-size your positions as
valuations looked a bit stretched. If that is going to be a moving target.
And so we are very much of the choppy and the short term great returns in a
longer period of time. As you see that navigation, both of
right-sizing positions year to date from that really fast price movement.
And then also this expected drop down in earnings in the next couple of quarters.
There's a line in one of our Bloomberg Terminals stories today about how
Microsoft is like one of the most widely held stocks in the world amongst retail
investors and institutional investors. What kind of a dynamic is that when you
talk to clients like it seems that Microsoft's always been there and you
want to have a piece of it. Yeah, Microsoft became the utility of
enterprise business.

And so, when you think about the structure of both business and personal life today, Microsoft is at the center of that. What Microsoft has built out for the consumer is a unique story, and so you can both look to them for having the free cash flow, the money, the money to build the future of infrastructure, while also providing those subscription level services that are so necessary for day-to-day operations. And so, from that perspective, it's really hard to break up with a position like Microsoft in a portfolio. Nick, I wanted to ask what this week is going to be like for you if you're a technology investor. You have just this incredible calendar of the world's biggest technology names reporting and that a Fed meeting slap bang in the middle of it. How do you operate like that in that environment? Yeah, you know, I think starting on Friday, what we started to see was the narrowing in the divergence between NASDAQ and small cap.

And so that gave us a better footing going into this week. When we think about the Fed, we really see that as creating this backdrop where we believe there can be wider participation. So we want diversified portfolios to have their moment in the sun again. I think seen too much return for too few names creates an investor sentiment that is systemically going to lead them in the wrong direction. At the same time, though, you've seen some of these names like matter where we've chosen to deploy more cash because you see where they're trading in from a relative valuation perspective. At 22 times, you have kind of a tiny risk there. And so you can play both sides of this leading into earnings when you have moments of volatility like we've had.

Big Tech Weighs on Stocks With Results on Deck

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