Microsoft is trading at valuations not seen since 2016,
Which was roughly the time they went over and spent most of their free cash flow into a failed phone business, and markets punished them for it.
Today, markets are once again punishing them for betting their FCF in the AI race with no guidance or objective other than to burn cash.
A great opportunity in a company that runs necessary software and functions in nearly every area of the services economy.
Alibaba is now down to the same range it was bound to since 2016 as well.
Yet,
The company has been growing their margins, market share, and free cash flow like clockwork.
More importantly, they’ve bought back massive amounts of stock, so the disconnect should be more than obvious here.
Our target price and overall thesis will be hosted in our next round of portfolio deep dives, starting this week. A bonus China deep dive will be provided for Alibaba’s case
Join our Premium Research subscription to access this deal and several more.