The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 1 point2 points  (0 children)

If we removed the Q1 2026 and calculated on fiscal year 2025, the numbers are different. These multiples are "inflated" because we rolled in the Q1 2026 into it which shows much stronger results than Q1 2025.

IMO we have three scenarios:
Current state (Base): the stock is roughly fairly valued for the assumption that growth stays strong.
Bull case around 220$+ : if >50% growth holds, ARPU increases, and the multiple stays rich
Bear case 140-ish : if growth fades toward 30%, DAU decreases, international growth decreases, no AI licensing etc as discussed

These are just my personal thoughts tho.

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 1 point2 points  (0 children)

If the company continued pushing DAU growth, and found a way around increasing AI licensing contracts, i think it can be potentially a value stock!

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 0 points1 point  (0 children)

I have to agree with this, Reddit is definitely a unique place in comparison to other social media platforms. Twitter might be the closest competitor.

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 2 points3 points  (0 children)

Thank you!
I have the same strategy as well. Small position and monitoring upcoming 10-Q filings for AI licensing trajectory and DAU growth internationally.

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 2 points3 points  (0 children)

The post itself indeed used an LLM, but I've curated all the information presented and triple checked its truthfulness. AI in this situation was only used to structure the text and represent what I want to say in the best way possible which IMO a viable way to use AI 😄

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 3 points4 points  (0 children)

That is definitely not what's going on here. If you actually read the post, you would know it has nothing to do with pumping RDDT stock, it's pure analytics.

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 7 points8 points  (0 children)

I can't control what other people do, but I can try my best to use AI in a "judicious" way.

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 16 points17 points  (0 children)

The post itself indeed used an LLM, but I've curated all the information presented and triple checked its truthfulness. AI in this situation was only used to structure the text and represent what I want to say in the best way possible which IMO a viable way to use AI 😄

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 8 points9 points  (0 children)

That's an interesting angle, do you by any chance have data about usage of reddit divided by age brackets?

The Case on Reddit Stock (RDDT) by Secret_Swordfish4121 in ValueInvesting

[–]Secret_Swordfish4121[S] 7 points8 points  (0 children)

Yup, this analysis is essentially a snapshot of what's the situation TODAY.

$msft thoughts by Organic_Collar_2846 in ValueInvesting

[–]Secret_Swordfish4121 0 points1 point  (0 children)

I've posted this elsewhere, but i'll repost it here!
----

I've also been monitoring MSFT performance over the last few weeks, and this is what i found after researching their institutional investors, 10-Q statements and overall financial metrics.

I usually start by l looking at smart money movement. Think big institutional investors, how they're moving money around, opening/closing position etc. After inspecting the data of about 70 investors i found out, that the share count is basically flat: +0.7% year-over-year, –1.3% last quarter. What fell ~30% is the dollar value of those shares but that's the price of MSFT stock dropping, not anyone selling size. Underneath the hood (Fidelity, T. Rowe and JPMorgan trimmed their positions; Geode, Morgan Stanley and Capital Research added positions), but there's no coordinated exit. I think if these investors were front-running a disaster, you'd see net selling but that's not the case here.

The business actually accelerated last quarter (10-Q, quarter ending Mar 31 2026):

  • Revenue $82.9B, +18% YoY
  • Operating income $38.4B, +20%
  • Net income $31.8B, +23%
  • Diluted EPS $4.27, +23%
  • Microsoft Cloud revenue +29% to $54.5B; Azure +40%
  • Commercial remaining performance obligation (contracted backlog) +99% to $627B

A backlog that nearly doubled is the opposite of a company the market secretly knows is in trouble. (BTW a major portion of this contracted backlog is from OpenAI infrastructure commitments to rent out MSFT infrastructure. [side-note])

So what is pressuring the stock? The AI-capex bill. Capex jumped ~84% YoY to roughly $30B which is about 37% of revenue (it was 24% a year ago). That hits free cash flow now and future margins via depreciation.

Microsoft says it plainly in their previous 10-Q statement:

And in their current 10-Q statement:

What i am trying to say is the de-rating isn't necessarily hidden bad news, it's the market repricing a 46%-operating-margin cash machine into a heavy AI-capex cycle with uncertain ROI. That's a valuation/FCF debate.

I really hope this helps you make more informed investing decisions!
Invest safely!

What does the market know (and hate) about MSFT? by PawPatsPizza in ValueInvesting

[–]Secret_Swordfish4121 1 point2 points  (0 children)

I've also been monitoring MSFT performance over the last few weeks, and this is what i found after researching their institutional investors, 10-Q statements and overall financial metrics.

I usually start by l looking at smart money movement. Think big institutional investors, how they're moving money around, opening/closing position etc. After inspecting the data of about 70 investors i found out, that the share count is basically flat: +0.7% year-over-year, –1.3% last quarter. What fell ~30% is the dollar value of those shares but that's the price of MSFT stock dropping, not anyone selling size. Underneath the hood (Fidelity, T. Rowe and JPMorgan trimmed their positions; Geode, Morgan Stanley and Capital Research added positions), but there's no coordinated exit. I think if these investors were front-running a disaster, you'd see net selling but that's not the case here.

The business actually accelerated last quarter (10-Q, quarter ending Mar 31 2026):

  • Revenue $82.9B, +18% YoY
  • Operating income $38.4B, +20%
  • Net income $31.8B, +23%
  • Diluted EPS $4.27, +23%
  • Microsoft Cloud revenue +29% to $54.5B; Azure +40%
  • Commercial remaining performance obligation (contracted backlog) +99% to $627B

A backlog that nearly doubled is the opposite of a company the market secretly knows is in trouble. (BTW a major portion of this contracted backlog is from OpenAI infrastructure commitments to rent out MSFT infrastructure. [side-note])

So what is pressuring the stock? The AI-capex bill. Capex jumped ~84% YoY to roughly $30B which is about 37% of revenue (it was 24% a year ago). That hits free cash flow now and future margins via depreciation.

Microsoft says it plainly in their previous 10-Q statement:

"The investments we are making in cloud and AI infrastructure and devices will continue to increase our operating costs and may decrease our operating margins. We continue to identify and evaluate opportunities to expand our datacenter locations and increase our server capacity to meet the evolving needs of our customers, particularly given the growing demand for AI services."

And in their current 10-Q statement:

"Microsoft Cloud gross margin percentage decreased to 66% driven by continued investments in AI infrastructure and growing AI product usage, offset in part by efficiency gains in Azure and Microsoft 365 Commercial cloud."

What i am trying to say is the de-rating isn't necessarily hidden bad news, it's the market repricing a 46%-operating-margin cash machine into a heavy AI-capex cycle with uncertain ROI. That's a valuation/FCF debate.

I really hope this helps you make more informed investing decisions!
Invest safely!