Microsoft Corporation (NASDAQ:MSFT) is one of the Magnificent Seven stocks Jim Cramer recently reviewed. Cramer said that he thinks the company is “doing fine,” as he remarked:
“The third-best performer in the Mag Seven last year, Microsoft was humming until late July. It peaked at… 555 bucks. Then it started getting hit and failed to regain its old highs, finishing the year up just under 15%….. I watch it go down every day. It’s crushing me… Look, I think Microsoft’s doing fine, but when they reported in late October, their guidance for Azure, which is their cloud infrastructure business, it came in light possibly because of supply constraints, which would be good. Plus, after previously saying that capital expenditures growth would be lower in 2026, management reversed course and told us that that would no longer be the case, which was just plain bad. At the same time, the stock was also held back by Microsoft’s heavy involvement with OpenAI. Now they own 27% of its for-profit business, which could be worth more than a hundred billion dollars, maybe more than that. On top of that, OpenAI is committed to spending 250 billion bucks with Microsoft’s Azure over the next several years. But lately, a lot of people are worried that OpenAI might not be able to pay its bills, which would be a real problem for Mr. Softee. Going forward, I still feel pretty good about Microsoft, especially if OpenAI can raise money at a valuation that’s close to the $800 billion number that’s been rumored.
Now, I have to tell you, as opposed to the end of last year, I am growing more and more confident each day that that will be the case, that OpenAI will not be a problem, it will not be the Achilles heel. Plus, I’d love it if their Azure business can outperform the recently lowered guidance. Look, if Azure can put up growth closer to 39, 40% than 35, then this stock could really roar. I am a believer in Microsoft, which is why we own it for the CNBC Investing Club. It is really a long-standing position.”
Image by Tawanda Razika from Pixabay
Microsoft Corporation (NASDAQ:MSFT) develops software, hardware, and cloud-based solutions. The company provides products like Windows, Azure, Office, LinkedIn, and Xbox.
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Disclosure: None. This article is originally published at Insider Monkey.
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