Investors should favor companies that have wide moats and can adapt.If you want to buy tech stocks that you can comfortably hold for the next two decades, you need to find companies with wide moats and the ability to adapt.Let's look at five tech leaders who have precisely those attributes.1. NvidiaNvidia (NVDA 1.68%) started out as a chipmaker supporting the video game industry: Its graphics processing units (GPUs) were designed to speed up graphics rendering in video games. However, it also created its CU ...

(Bloomberg) -- Microsoft Corp.’s data-center crunch will continue for longer than the company has previously outlined, underscoring the software giant’s struggles to keep up with cloud demand.Many of Microsoft’s US data center regions are experiencing shortages of physical space or servers, according to people familiar with the company’s internal forecasts. New subscriptions for Azure cloud services are restricted in some crucial server-farm hubs, including Northern Virginia and Texas, through the first hal ...

Core Viewpoint - Microsoft Corporation is likely to avoid fines from the European Union's antitrust case regarding Microsoft Teams, which is seen as a positive catalyst for its stock performance during a period of market uncertainty [1]. Group 1: Antitrust Case and Proposal - The EU's antitrust case involves allegations that Microsoft abused its market dominance by bundling Microsoft Teams with its Office suite [2]. - Microsoft has proposed to offer the Office suite without Teams at a lower price, which is viewed as a resolution to competitors' concerns [3]. - The EU will seek feedback from Microsoft’s rivals and customers on this proposal, allowing a month for responses [3]. Group 2: Financial Implications - Microsoft has previously paid over 2 billion euros (approximately $2.67 billion) in fines related to EU antitrust issues, making the resolution of this case significant for its earnings outlook [4]. - The price difference between the Office suite with and without Teams is 8 euros (about $9), indicating a potential shift in pricing strategy [5]. Group 3: Market Position and Stock Performance - Microsoft stock has shown positive momentum, with analysts optimistic about the company's investments in AI and cloud computing [8]. - The current price target for Microsoft stock is $512.63, suggesting a 13.29% upside based on analyst ratings [9]. - Despite some concerns about overvaluation, Microsoft's strong fundamentals and market position indicate a favorable outlook for investors [11].

Core Viewpoint - Microsoft is positioned as a strong investment opportunity due to its advancements in AI, particularly with Microsoft 365 Copilot, which is expected to reshape the AI landscape [1] Company Overview - Microsoft Corp. develops and supports software, services, devices, and solutions, operating through segments such as Productivity and Business Processes, Intelligent Cloud, and More Personal Computing [2] AI Integration - Microsoft is integrating internal and third-party AI models with Microsoft 365 Copilot, following a $13 billion investment in OpenAI, which is seeking to change its non-profit status [3] Earnings History - Microsoft has achieved four consecutive earnings beats, with an average positive earnings surprise of 5.2% over the last year, including a recent earnings print of $3.46 against a consensus of $3.20, resulting in an 8.13% surprise [5][4] Earnings Estimates Revisions - Earnings estimates for Microsoft have been revised upwards, with the current quarter estimate at $3.35, next quarter at $3.53, and full-year 2025 at $13.30, reflecting positive adjustments [6] Growth Projections - Revenue is projected to reach approximately $278 billion in 2025, indicating a growth rate of about 13.6%, with further sales expected to exceed $313 billion in the following year, representing a growth of 12.4% [7] Recent Performance - The most recent quarter reported a topline growth of 13.3%, suggesting that revenue estimates may be conservative [8] Valuation Metrics - The forward PE ratio stands at 33x, influenced by the $13 billion investment in OpenAI, while the price-to-book ratio is 10x and price-to-sales ratio is 12x, which may be considered low given the company's solid revenue growth [9]

Core Viewpoint - Microsoft is positioned as a leader in the artificial intelligence (AI) sector, leveraging its early investment in OpenAI and integrating AI tools across its product ecosystem to drive growth despite recent stock market pressures [1][2]. Group 1: AI Leadership - Microsoft has identified AI as a transformative technology, enhancing business operations and individual creativity through automation and actionable insights [4]. - The company integrates AI capabilities into its existing products like Outlook, Word, Excel, and Teams, while also empowering enterprise customers through its Azure cloud services [5][6]. Group 2: Data Center Boom - In the fiscal second quarter, Microsoft reported a 12% year-over-year revenue increase and a 10% rise in earnings per share (EPS), with a notable 21% revenue growth from server products and cloud services driven by AI [7]. - The growth is linked to a data center development boom, with Azure serving as the backbone for enterprise AI workloads, supported by significant investments in AI-optimized infrastructure [8][9]. Group 3: Growth Outlook - Analysts forecast a revenue increase of 13.1% for 2025 and 14% for 2026, with projected revenues exceeding $300 billion by next year [10][12]. - EPS is expected to reach a record $13.16 in 2025, reflecting an 11.5% growth from 2024, with potential for outperformance in a resilient economic environment [10][13]. Group 4: Valuation - The recent stock dip has reduced Microsoft's valuation premium, with shares trading under 30 times the consensus 2025 EPS, below the five-year average of 34, indicating potential undervaluation [14][15]. - Continued strong quarterly results could lead to a recovery of the stock to its previous record-high price [15]. Group 5: Investment Perspective - Microsoft is considered a strong investment opportunity for exposure to the AI revolution, with potential long-term rewards despite short-term market volatility [16].