The Motley Fool on $MSFT (Oct 30, 2026)

Microsoft reported that my reaction to Microsoft was a little less negative, but the reaction to Asit, Alphabet's report, is quite strange. The share price has fallen by 13%. They reported 100% growth in their cloud business.

But then look at Microsoft. The market is looking for some reassurance from Microsoft. Their cloud growth rate is an astonishing 48%. This is half the growth rate of Google Cloud's business.

However, the market is happy because Microsoft is not taking unnecessary risks. They are mostly covering expenses from free cash flow.

Jason, it wasn't that long ago when Microsoft was a company that wasn't spending fast enough. I think they stopped their capital spending for two weeks, and the market was very unhappy that they weren't spending as much as they could on building this AI.

Whereas Microsoft is in positive free cash flow. It reminds me of Apple from the last few years.

and in the case of Microsoft, they have improved their approach a little. Microsoft's free cash flow this quarter was almost double what analysts had estimated, and that's a big positive.

Look, we're still spending, but we're also earning it, right?

Microsoft has a lot of CPU-based servers. They will do very well in this agentic space. It turns out that agents, as Jason and I were discussing a few weeks ago, use a lot of CPU.

So, that's great, which is going in Microsoft's favor.

a lot of these deals are with companies that we've already talked about today. Alphabet, Amazon, Microsoft.

If you look at what EA is currently worth, what Activision Blizzard is probably worth under Microsoft, which is certainly not even close to the $69 billion they paid.