Seeking Alpha
31 Oct 2026, 16:07 UTC · 2h ago
Microsoft Q1: CROCI Says My 'Trim, Not Exit' Thesis Remains Firmly In Place
Impact · against what's priced in
The article provides no new catalyst for MSFT as the market is already pricing in revenue growth around 20% and ignoring the most aggressive AI bull cases. The warning regarding margin pressure and capital efficiency is a confirmation of the existing risk that Microsoft cannot expand free-cash-flow margins beyond 20%.
- MSFT−0.10
Already priced in
- The price assumes
A 20% free-cash-flow margin on roughly $332 billion of FY2026 revenue.
The report that COGS and OpEx will outpace revenue growth confirms the difficulty of expanding free-cash-flow margins beyond the 20% the price currently assumes.
What MSFT's price assumes · Sep 21
