$Microsoft(MSFT.US)

MSFT is the most hated company, but it might be the last bullish thesis for the first half of the year.

Windows forced updates, Teams being anti-human, Azure console configuration taking at least three hours to start. But on the tail end of the first half of 2026, it might be the only AI asset institutions are still willing to huddle together for.

At a price of 424.82, PE is 26.6x, Forward PE is 22x.

Just before the earnings report, they changed the OpenAI agreement: from exclusive to non-exclusive, but no longer have to pay revenue sharing, Azure still gets the first release. Morgan Stanley says this is a "deterministic upgrade," plugging the money-burning hole.

There's also some fluff; out of the $625 billion commercial backlog, 45% ($281 billion) comes from OpenAI.

And OpenAI just slashed its future computing power expenditure from $1.4 trillion to $600 billion.

Copilot has 15 million paid seats, which is only 3.3% of the 450 million commercial users, and its growth rate has already fallen from a high to 6%.

$80 billion poured into AI infrastructure every year, Google Gemini already has 8 million enterprise users, and Microsoft is still proving that the enterprise entry point is highly profitable.

But as long as Azure maintains 35%+ growth, the market doesn't dare to significantly lower the valuation framework.

Do a simple valuation,

Pessimistic (380-400): Azure falls below 35%, 23-25x PE

Baseline (470-520): Azure reaches 30%+, Copilot boosts ARPU, 27-30x PE

Optimistic (560-620): AI supply can't meet demand, paid rate breaks 5%, 32-35x PE

The implied PE multiple for the pessimistic scenario is 23-24x

Possible triggers are Azure growth falling below 35%, AI capex continuously compressing gross margin, Copilot penetration stagnating

Microsoft can become the last bullish narrative of the first half of the year, all thanks to its peers setting a low bar.

Amazon retail is under pressure, Apple has no AI model, Google is stuck in the antitrust quagmire.

Microsoft's moat is those things that can't be cut off: Windows, Office, GitHub, AD, LinkedIn. Slower AI is a good thing; subscription fees are the eternal cash cow.