Parkev Tatevosian, CFA on $MSFT (Nov 3, 2026)
MSFT's quarter was mixed: cloud accelerated while Windows OEM declined and worsened; it remains one of the Big Four and the only one projected to have positive free cash flow in 2027. The speaker is positive on AI software, citing Copilot daily users up nearly 50% q/q and 5x y/y, satisfaction up about 20% q/q to a record, expected Office improvements like Google's suite, willingness to pay $5-$10 more on a sub-$20 product, and a long runway to add AI and create a positive cycle.
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Microsoft announced its quarterly financial results, which showed mixed performance. Some sectors, such as cloud revenues, have accelerated , while others, such as Windows OEM sales, have declined and are getting worse .
Overall, Microsoft remains one of the Big Four companies, which also include Amazon, Meta, and Alphabet. It remains the only company projected to have positive free cash flow in 2027.
So, I know many investors are curious to see what happens with Microsoft. Let's begin our in-depth analysis in this video, where we will cover the details of the latest developments in Microsoft's most recent quarterly performance.
One of the things I'm watching closely at Microsoft is their adoption of AI-enhanced software. I mean things like "Copilot", right? And Microsoft Office. Is this product gaining increasing adoption?
Do they achieve higher average revenue per user by improving the product with more artificial intelligence, making it more valuable to business users?
The answer is yes, they do . They announced the biggest update to Copilot this quarter, and they have already shown strong growth in this category.
The management team stated that daily users increased by nearly 50% compared to the previous quarter, and by 5 times compared to the same period last year. User satisfaction has improved by about 20% compared to the previous quarter, and is now at its highest level ever.
So, we are seeing evidence that people love these updates and improvements to their AI-integrated services. Now, I was asking for your feedback on how Microsoft Office products have evolved and improved, because I use Google's productivity suite and I see a great improvement in it.
Therefore, I expect a similar improvement in performance at Microsoft as well.
If a business user sees greater value in these products, they will be willing to pay an additional $5 or $10 per month. This is a significant increase for a product that already costs less than $20 a month.
This is the area where I see Microsoft having a long way to go to continue enhancing those products with more artificial intelligence, increasing their value and creating this effective positive cycle.
The management team said that in the healthcare sector , they automated 30 million patient interactions during the quarter, a 70% year-over-year increase.
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Parkev Tatevosian, CFA has 10 calls on this stock; only the adjacent ones are shown.