Trade Tracker: Kevin Simpson sells a covered call on Microsoft

Investment Strategy - The firm implemented a covered call strategy on various holdings, including Microsoft, due to perceived market overvaluation and heightened volatility during earnings season [1] - The covered call strategy primarily aimed to generate premium income, with most options expected to expire worthless [1][2] - A 30% call was written on Meta at $507, anticipating $30-$40 in premium, but the option is likely to be called away as the stock price approached $580 [2] Microsoft's Outlook - An analyst set a target price of $640 for Microsoft, previously at $515 [2] - The firm expresses confidence in Microsoft's long-term prospects, citing its institutional strength and market leadership [5] - The firm believes the upcoming Windows 10 end-of-life will drive a significant upgrade cycle to Windows 11, boosting both software and hardware sales [4] - The firm dismisses concerns about OpenAI's potential to "eat Microsoft alive," emphasizing Microsoft's resilience and ongoing innovation [3][5] - The firm disregards Elon Musk's comments about OpenAI threatening Microsoft, advocating for a steady approach to Microsoft investment [6]