No qualifying author-owned investment thesis was confirmed in this post.
The author explicitly states they have limited personal conviction and are underweight the stock, which contradicts the requirement for a clear directional investment judgment.
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Something that got a lot of attention last week was OpenAI’s diagram of AI agents sitting in layers over existing enterprise software “systems of record”. They wouldn’t replace those enterprise applications, but they’d be how users interact with CRM or SAP or whatever. Kind of like the executive who doesn’t use CRM himself, but tells his assistant what he wants.
I found this explainer that presents the general bear case well. It’s an X post, sorry no other link.
https://x.com/zain\_hoda/status/2019049069134417975?s=46
A friend and I were discussing if this could apply to MFST. We constructed this bear case.
The concept of agents layered over applications could certainly work with Office. That’s what many of the early agent efforts do.
MSFT is trying to do it themself with CoPilot. Reviews are mixed to say the least. MSFT knows it is vital and is diverting AI compute capacity from Azure to own products and R&D. They could be forced to divert more now.
I assume GOOG is racing to “agentify” Google Docs, which is already the main competition to Office. It should have advantages: own model, own hardware, code all cloud none local, less demanding users, fewer specialized use cases.
Check this link out. I hadn’t realized how big GOOG is in office suite software. They don’t monetize it that much, do they? https://electroiq.com/stats/microsoft-365-statistics/
If MSFT suceeds in self-occupying the agent layer over Office (we’re assuming that concept works) how much more revenue will it get for each Office user? Maybe it can double rev/user. CoPilot $20/mo + 365 $20/mo. Too much more will cede share to GOOG.
Agents are compute intensive. Most of 400 MM Office users actively running agents all day seems like enough to constrain capacity growth for Azure, considering MSFT’s capex spend is lower than other hypers and it lacks proprietary hardware.
MSFT would face a tradeoff. Investors probably wouldn’t like that.
Anyway, that’s a bear case for the MSFT-interested. I am underweight the stock but do own it, so I don’t seem to have much conviction personally.