I struggle to understand the argument for buying MSFT over other Mag 7s even if cheaper.
u/Pete26l96 ·
Reddit — r/ValueInvesting
· March 26, 2026 at 07:38
· ⬆ 15 pts
· 💬 15 comments
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Summary
The author argues against buying MSFT, believing its recent dip is a value trap and that its legacy dominance is fading across gaming, hardware, and enterprise software.
The post suggests that other Magnificent 7 stocks like Google, Amazon, and Meta offer better value and stronger moats despite slightly higher valuations.
Quality assessment: Speculative qualitative analysis. The author provides strategic arguments but lacks hard financial metrics or valuation models to back up the claims.
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it genuinely seems to me that most people are buying MSFT solely because it's gone down the most and they expect a reversion to the mean. I don't doubt this will happen, but Value Investing wise, it doesn't make sense to buy primarily for this reason.
The days of it's enterprise dominance due to legacy operations is coming to an end and many of it's subsidiaries have basically lost in their respective industries (Xbox, Activision/Blizzard, Surface Devices, etc.)
Office is being replaced by Gsuite in the government. Azure is lagging Google Cloud in innovation and AWS in infrastructure and output. Not to mention Azure's recent growth isn't even that great when you consider it's boosted by one time migrations, inclusion of random online subscriptions, and a huge amount of the bookings are tied to Open AI.
Copilot lags far behind other LLMs / AI tools.
For a slightly higher valuation you can just buy Google, which is at the forefront of AI / innovation. Likewise, Amazon also offers a more compelling infrastructure play with a wider moat for a slightly higher valuation.
Even Meta makes more sense than MSFT as it's grip on social media is much tighter than Microsoft's grip in the software/hardware space.
Idk, I just don't get all the recent hype around MSFT, or clsims about how it's a must buy.
I've even see people say "Google already went up a lot so it's too late to buy", or "Amazon has lagged the last 5 years so it doesn't make sense to buy", both of which make no sense from a value investing stahd point.
Meta has a very tight grip on the social media landscape. Meta's monopoly in social media is stronger than Microsoft's current grip on the software/hardware space. Meta makes more sense as a long-term investment than MSFT. Ad-spending downturns or regulatory actions against social media.
AWS leads Azure in infrastructure and output. Amazon offers a more compelling infrastructure play with a wider moat than Microsoft. Amazon is a better buy than MSFT despite lagging stock performance over the last 5 years. Slowdown in cloud spending or retail margin compression.
Google is at the forefront of AI and innovation, and Gsuite is replacing Office in government sectors. For a slightly higher valuation than MSFT, Google offers superior technological leadership and market share capture. Buy Google over MSFT for better long-term value and AI exposure. Regulatory/antitrust risks or failure to monetize AI effectively.
MSFT's subsidiaries are losing ground, Office is losing government market share to Gsuite, and Azure/Copilot lag competitors. Investors are buying MSFT solely for mean reversion, ignoring fundamental deterioration in its competitive moat. Avoid buying MSFT as a value play, as its enterprise dominance is coming to an end. MSFT's AI investments (OpenAI) could yield higher-than-expected returns, or enterprise stickiness remains stronger than anticipated.
This Reddit post, published March 26, 2026,
features u/Pete26l96
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