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  • COMPANY HIS TOP CLOUD PLAY FOR

  • 2023

  • CALLING IT A, QUOTE, MASSIVE

  • OPPORTUNITY.

  • WEDBUSH STAR ANALYST DAN IVES

  • JOINS US AT POST NINE.

  • GOOD TO HAVE YOU HERE.

  • HERE IS THE SITUATION, OKAY.

  • I'VE GOT TWO THINGS GOING ON

  • I GOT DAN IVES, RIGHT, THE STAR

  • ANALYST THAT WE SAY, SUGGESTING

  • THAT THIS STOCK IS STILL UNDER

  • APPRECIATED AS AN OPPORTUNITY

  • THAT IT IS AN OUTPERFORM, BUT

  • THEN I GOT THE COMPANY'S CEO

  • HIMSELF, SATYA NADELLA, WHO A

  • COUPLE OF WEEKS AGO SAID THE

  • NEXT TWO YEARS ARE GOING TO BE

  • TOUGH.

  • IVES HAS AN OUTPERFORM

  • NADELLA HAS A HOLD

  • WHY SHOULD I LISTEN TO IVES AND

  • NOT NADELLA?

  • >> YEAH, AND NADELLA OBVIOUSLY

  • HALL OF FAME CEO AND PART OF OUR

  • BILLISH

  • BULLISH THESIS ON MICROSOFT.

  • WHAT IS INTERESTING TO ME IN

  • TERMS OF ALL OF OUR CHECKS OVER

  • THE LAST WEEK, WE'RE ONLY SEEING

  • ABOUT 6% TO 7% OF DEALS REALLY

  • PUSH OR GET DOWNSIZED AND BY

  • LOOK AT THE LAST QUARTER, 3% TO

  • 4%

  • IN MY VIEW THIS BECOMES MORE AND

  • MORE OF A CLOUD PLAY, LESS OF A

  • PC CALL NONCLAUDOUD AS WE GO IN

  • NEXT YEAR.

  • I VIEW THIS AS A SIGNIFICANT

  • RISK REWARD HIRE.

  • >> THE REASON INVESTORS HAVE

  • AGREED WITH YOU, THEY SAID IT IS

  • A CLOUD PLAY, FOR AZURE.

  • BY VIRTUE OF THE FACT THEY'RE

  • WILLING TO PAY A HIGH PREMIUM

  • VALUATION TO THE MARKET FOR THIS

  • WHOLE TIME

  • BUT NOW AZURE GROWTH IS SLOWING.

  • WHY SHOULD I PAY ANYWHERE CLOSE

  • TO A MULTIPLE I WAS PAYING

  • BEFORE AND NOW I KNOW THE

  • MULTIPLE HAS COME IN, BUT YOU

  • CAN SAY IT IS EXPENSIVE RELATIVE

  • TO WHERE THE MARKET IS.

  • >> IT IS A GREAT DEBATE.

  • MY VIEW IS IF THIS IS ULTIMATELY

  • AZURE GROWTH THAT WE CAN SEE

  • ABOVE 30% IN LOW SINGLE DIGIT IT

  • SPENDING ENVIRONMENT

  • WHAT I BELIEVE IS STILL IF YOU

  • LOOK AT THE AVERAGE MICROSOFT

  • INSTALL BASE, WE'RE STILL FOUR

  • OF EVERY TEN OF SIGNIFICANT MOVE

  • TO THE CLOUD, MOST OPPORTUNITIES

  • AHEAD, NOT BEHIND.

  • AND ALSO, MORE AND MORE

  • AGGRESSIVE, LOOK AT OPEN AI,

  • MORE OF THESE AGGRESSIVE BETS,

  • ACTIVISION, NOT A COMPANY THAT

  • IS GOING TO THE RIGHT LANE.

  • >> BUT WHEN THE CEO HIMSELF SAID

  • WHAT HE DID, YOU WEREN'T MOVED

  • BY THAT AT ALL IN.

  • >> NADELLA IS A TACTICIAN, THE

  • GOLD STANDARD IN MY OPINION.

  • AND WHAT I THINK HE'S DOING,

  • WHICH IS IMPORTANT, LAY THE

  • GROUND WORK FOR A TOUGHER

  • ENVIRONMENT FOR THE NEXT FEW

  • YEARS.

  • BUT IN REDMOND IN THE WALLS OF

  • REDMOND, THIS IS NOT A COMPANY

  • THAT IS ACTING DEFENSIVE

  • SO NADELLA IS TALKING ABOUT

  • THAT, BUT ULTIMATELY IN TERMS OF

  • THE PLAYBOOK, THEY'RE GOING ON

  • THE OFFENSE, NOT JUST IN TERMS

  • OF M & A, BUT FROM A CLOUD

  • PERSPECTIVE, THEY'RE GOING TO

  • GET MORE SHARE VERSUS AMAZON AND

  • SOME OF THE COMPETITORS.

  • >> WHAT ABOUT THIS SAID $10

  • BILLION INVESTMENT WE'RE TALKING

  • ABOUT.

  • >> I LOVE IT, IT IS A SMART

  • STRATEGIC POKER MOVE

  • IN MY OPINION, YOU GO BACK TO

  • THE LATE 90s, ANTITRUST,

  • UNCERTAIN MACRO, THEY PEELED

  • BACK

  • HERE YOU WANT TO GO AGGRESSIVE

  • IN ONE OF THE BEST MOST

  • INNOVATIVE AI TECHNOLOGIES OUT

  • THERE.

  • THEY ALREADY INVESTED IN IT.

  • TAKE A STEP BACK NOW

  • I BELIEVE AI IS NADELLA,

  • MICROSOFT, REDMOND.

  • >> DO YOU THINK THAT, WE

  • REFERENCED THIS SOME 43 OR 44

  • MINUTES AGO, ABOUT THE LAGGARDS

  • OF '22 EMERGING IN THE BEGINNING

  • OF 2023 AS SOME OF THE WINNERS

  • YOU THINK THAT'S LEGIT FOR SOME

  • OF THE COMPANIES LIKE MICROSOFT,

  • SALESFORCE, FOR EXAMPLE, LOSERS

  • THAT ARE WINNERS RIGHT NOW

  • DOES THAT HAVE SOME KIND OF

  • STAYING POWER OR THAT A MEAN

  • REVERSION, SHORT-LIVED, WHAT IS

  • YOUR VIEW?

  • >> I THINK IT IS A GREAT POINT

  • IN TERMS OF THE ENTERPRISE

  • YOU LOOK AT ENTERPRISE CLOUD

  • THAT IS WHERE I BELIEVE IT GOING

  • TO BE A LOT MORE RESILIENT IN

  • THE SPENDING ENVIRONMENT

  • TALKING TO INVESTORS EVERY DAY,

  • IN 2023, EVERYONE IS, OKAY,

  • WHERE ARE THE NUMBERS I CAN

  • STRESS TEST?

  • NUMBERS HAVE COME DOWN, BUT A

  • LOT IS BAKED INTO VALUATION

  • WHERE I BELIEVE THE GROWTH IS

  • GOING TO BE, CONSUMER, DIGITAL,

  • OTHER AREAS, YOU CAN HAVE

  • ANOTHER LEG DOWN

  • THAT'S WHY I THINK IN TERMS OF

  • WHAT HAS HAPPENED IN MICROSOFT,

  • LOOK AT SALESFORCE AND BENIOFF,

  • THOSE ARE TWO OF OUR TOP PICKS,

  • RISK REWARD.

  • >> TOM LEE YESTERDAY, I THINK

  • YESTERDAY, TOLD ME SITTING WHERE

  • YOU ARE, HE THINKS FAANG COULD

  • BE UP 50%.

  • I NEAR FELL OUT OF MY CHAIR.

  • IS THAT SOMETHING ON YOUR RADAR

  • TOO?

  • ARE WE GOING TO HAVE A BIG

  • BOUNCEBACK FOR FAANG

  • >> I THINK IT IS GOING TO BE A

  • MASSIVE BOUNCEBACK AND TECH

  • STOCKS OVERALL UP 20% AND BIG

  • TECH UP ABOVE THAT BECAUSE IT IS

  • MY VIEW THAT FUNDAMENTALS ARE

  • GOING TO HOLD UP BETTER THAN

  • BEING BAKED IN, WHISPER NUMBERS

  • 10% TO 15% BELOW THE STREET.

  • YOU LOOK

  • IF YOU LOOK AT OVERALL TECH, I

  • BELIEVE NOW IT IS UNDEROWNED AS

  • I'VE SEEN TECH, GOING BACK TO

  • 2009 AND MAYBE 2002.

  • >> BETTER HOPE EARPINEARNINGS WE

  • DECENT

  • WHAT IF THE COMMENTARY IS DOUR

  • LIKE NADELLA WAS.

  • >> IF IT IS JUST DOWNRIGHT

  • DISASTER, HORRIFIC, OKAY, THAT'S

  • NOT BAKED INTO -- THEY CUT

  • GUIDANCE 15%, 20%.

  • RIGHT NOW, YOU START TOO HAVE

  • SOME SORT OF MODEST EXPECTATIONS

  • WITH SOME DARKENING AND FX PLAYS

  • AN ISSUE, WE SIT HERE IN EARLY

  • TO MID-FEBRUARY BEING, LIKE, BIG

  • TECH BOUNCE 15% THROUG

COMPANY HIS TOP CLOUD PLAY FOR

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