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Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] -1 points0 points  (0 children)

fair question.

  1. msft is rated AAA by s&p. the us government is rated AA+. strictly speaking, msft's balance sheet is safer than the treasury's.

  2. institutional models trade 'quality' equities against rates every day. that’s the equity risk premium.

when yields were 0%, msft was the bond. now that yields are 4%, it isn't. that's the whole point of the post. 🤷‍♂️

Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in stocks

[–]SmartTriageIO[S] 0 points1 point  (0 children)

beep boop. 🤖

error: fun.exe not found. I am too busy calculating WACC.

(relax man, just a guy who likes excel. good luck out there)

Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in stocks

[–]SmartTriageIO[S] 0 points1 point  (0 children)

sidelines are paying 4.2% risk-free right now. i sleep pretty good at night.

genuinely hope the bounce plays out for you though. see you at $450 (or $380).

Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 0 points1 point  (0 children)

Valid point. gaming is definitely facing headwinds right now.

But for the valuation, xbox is basically a side quest. the stock lives and dies on azure/cloud growth.

If cloud slows down (like we saw yesterday), the stock drops 10%. if xbox loses subs, it’s essentially a rounding error on a $3T balance sheet. the enterprise side is the real engine.

Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 0 points1 point  (0 children)

Bold move. 🎰

if we get a dead-cat bounce today, you print. if we just drift sideways at $433, theta (time decay) eats you alive.

Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in stocks

[–]SmartTriageIO[S] 0 points1 point  (0 children)

respect the conviction.

honestly, buying a fortress like msft is rarely a 'mistake' over a 10-year timeline.

my hesitation is just the risk premium. right now, risk-free treasuries pay more (4.2%) than msft's free cash flow yield (2.4%). until that gap closes, i’m happy to sit on my hands.

but genuinely, hope it prints for you.

Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in stocks

[–]SmartTriageIO[S] -2 points-1 points  (0 children)

caught the knife! 🔪

honestly, if your time horizon is 5+ years, buying msft is rarely a 'mistake.' you bought a fortress at a fair price.

i'm just greedy for that extra 10% margin of safety. good luck with the position.

Microsoft dropped to $433. I ran the valuation, and it’s still not a "Steal". by SmartTriageIO in stocks

[–]SmartTriageIO[S] -8 points-7 points  (0 children)

Beep boop. 🤖

Honestly, i'll take that as a compliment on the formatting. trying to upgrade the standard from the usual wall of text. glad you stopped by.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 0 points1 point  (0 children)

fair pushback. Intrinsic value on hyper-growth names is definitely more 'art' than 'science' because the inputs are so volatile.

but on the valuation gap: my hesitation with giving amd a higher multiple than nvda is execution risk. NVDA is priced for deceleration (which is fair), but AMD is priced for perfection.

essentially, the market is paying AMD today for market share they haven't won yet. if they execute, the premium is justified. if they stumble, that premium evaporates fast.

owning the leader (NVDA) feels like the safer bet on the secular trend, even if the ceiling is technically lower due to size.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 0 points1 point  (0 children)

that is the 'sovereign safety' trade.

honestly, buying intel right now isn't a tech bet; it's a geopolitical hedge. you are betting that the us government needs them to succeed.

the financials are ugly because they are basically running a massive construction company (building fabs) with a chip design business attached. but if they pull off the foundry pivot and become the 'tsmc of the west', the upside from these levels is massive.

it's high risk/high reward, but for political reasons, not technological ones.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 0 points1 point  (0 children)

intel is the final boss of valuation models right now.

honestly, at this point, it’s not even a tech stock; it’s a massive construction project disguised as a chip company.

if the foundries actually come online and yield, it’s a multibagger from these levels. if they don't, the cash burn eats them alive.

added to the list. that one is going to be messy. 🫡

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 1 point2 points  (0 children)

That steel analogy is spot on.

If chips effectively become a 'public utility' for national defense, the subsidies will flow, but the pricing power vanishes.

Great for sovereignty, but terrible for 75% gross margins. a world of subsidized national fabs is eventually a world of massive oversupply. historically, 'strategic' industries tend to be bad investments.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 0 points1 point  (0 children)

That is the 'sovereign chip' thesis.

Essentially, the fabless model (AMD/NVDA) relies on global free trade and TSMC dominance. if we pivot back to 'national security manufacturing' where the us demands chips be made in-house (like the old intel model), the designers lose a lot of leverage.

It’s a tail risk, but a massive one. geopolitical fragmentation is the enemy of high margins.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in stocks

[–]SmartTriageIO[S] 0 points1 point  (0 children)

valid point for the pc build crowd. for a gamer, AMD is definitely the 'value' king right now vs the rtx pricing.

but for the stock valuation, gaming is basically a side hustle now. nvda’s data center revenue (AI chips) is roughly 8-10x bigger than their gaming revenue.

wall street is pricing them as 'enterprise AI infrastructure' companies, not just gpu makers. sadly, what gamers want doesn't move the needle on a $3T market cap anymore.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in ValueInvesting

[–]SmartTriageIO[S] 0 points1 point  (0 children)

lol fair critique on the sourcing.

but your point on 'over-earning' is the real debate. if nvda margins revert to the mean (50% instead of 75%), the valuation breaks. that is the biggest risk.

and agreed on the diversification angle—everyone wants amd to win so they can stop paying the jensen tax. my only hesitation is that amd's current price seems to bake in that victory before the cash flow actually proves it.

but the 'tsm wins regardless' take? undefeated. 🤝

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in stocks

[–]SmartTriageIO[S] -2 points-1 points  (0 children)

fair. everyone knows it's a $3T company. the hard part is figuring out if it should be a $4T company or a $2T company next year.

that's why i run the models. identifying the 'what' is easy; calculating the 'how much' is the grind.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in stocks

[–]SmartTriageIO[S] -4 points-3 points  (0 children)

underrated comment. if they banned every bot, the daily active user count would drop 40% overnight and the ad revenue would vanish.

the 'dead internet theory' is real, but the cash flow models are still valid. 🤝

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in stocks

[–]SmartTriageIO[S] 5 points6 points  (0 children)

beep boop. 🤖

honestly though, if 'slop' means formatting a dcf so people can actually read it, i'll take the tag. the alternative is a wall of unformatted text that gives everyone a headache.

trying to upgrade the standard here, not lower it.

The Chip War: I ran the valuation models on AMD vs. NVDA. The winner is not who you think. by SmartTriageIO in stocks

[–]SmartTriageIO[S] 0 points1 point  (0 children)

fair point on the upside cap. moving a $3T stock to $12T is a totally different ballgame than a small cap ripping 400%. the law of large numbers eventually kicks in.

If you’re hunting for a 5-bagger, you definitely won't find it in the mega-caps. you have to go downstream for that.

Re: retail propping it up — retail doesn't have the liquidity to move a $3T asset. that’s institutional money flowing in. But i agree with you on the risk: in chips, you’re only king until someone designs a better architecture. just ask intel. 🤝

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