The Motley Fool·2026-02-05 09:30Microsoft - Stanley Druckenmiller sold his entire stake in Microsoft during the third quarter, which ended four months ago [2][3] - Microsoft's financial results for the December-ended quarter showed a 17% revenue increase to $81 billion, with non-GAAP net income rising 24% to $4.14 per diluted share [5] - Concerns about capital expenditures, which increased by 66% in the quarter due to investments in AI infrastructure, led to a sharp decline in Microsoft's stock [6] - The investment thesis for Microsoft is based on its strength in enterprise software and cloud services, with the enterprise software market expected to grow at 12% annually through 2030 and the cloud computing market at 16% annually through 2033 [7] - AI is central to Microsoft's growth strategy, with a 160% increase in paid Microsoft 365 Copilot seats and a tenfold increase in daily active users in the December quarter [8] - Microsoft Foundry, a cloud service used by over 80% of Fortune 500 companies, saw nearly 80% growth in customers spending $1 million per quarter [9] - Currently, Microsoft stock is 24% below its high, trading at 27 times earnings, with adjusted earnings forecasted to grow at 15% annually through the fiscal year ending in June 2027 [10] Amazon - Druckenmiller initiated a position in Amazon during the third quarter, with the company's financial results for the September-ended quarter showing a 13% revenue increase to $180 billion and a 25% increase in non-GAAP operating income to $21.7 billion [12] - The investment thesis for Amazon is based on its strengths in online retail, digital advertising, and cloud services, with retail e-commerce sales projected to grow at 12% annually through 2030, adtech spending at 14% annually, and cloud computing at 16% annually through 2033 [13] - Amazon has integrated AI across its core businesses to enhance sales and operational efficiency, utilizing generative AI tools for demand forecasting, inventory management, and delivery optimization [14] - Amazon Web Services monetizes AI at various layers of the technology stack, including custom chips, generative AI services, and application-level tools [15] - During the third quarter, Amazon's share price averaged $220, and although it is slightly more expensive today, its valuation of 33 times earnings remains reasonable with earnings expected to grow at 15% annually through 2027 [16]