MSFT's Last dance before earnings

$Microsoft(MSFT)$ is up over 4% in a single day and one of the most volatile and biggest days in its history.There are a couple reasons why it's up so much:

1. The hottest Stargate hype of late, but not really too much about Microsoft.Although there is an inflow of funds in the AI circle, Microsoft will also share the benefits.But the secondary market currently lacks channels to invest directly in OpenAI, so the logic of speculating on MSFT to speculate on OpenAI is the same as buying $Destiny Tech100 Inc(DXYZ)$ to speculate on Starlink, which is actually a premium.Guess if that premium is still there if OpenAI goes public?

2. There is a lot of hype about next week's earnings expectations, but it doesn't take into account the "flashpoints" at all.One of the potential flashpoints for CYQ4 (FY25Q2) is the increase in depreciation and amortization from capital expenditures, resulting in profit growth not keeping up with revenues.And down the road capex continues to increase, meaning profit erosion will only get worse, depending on how much the market minds.

3. AI application layer outbreak year, the whole market incremental all together, but the competition is also beginning to fierce.Whether the cloud business Azure can be maintained at 30% + growth rate is a key, in addition to the price increase after the Office package how many users to buy is also a problem.After all, the B-end and C-end after comparing such AI applications, will ultimately only choose the one that is the best to use.

4. On a trading level, MSFT could become a "proxy" for AAPL as a "low-beta" hedge among big tech companies. $Apple(AAPL)$ become a "low-beta" hedge among big tech companies in some cases due to its massive cash reserves, steady buybacks, and largest market capitalization, and it can't afford to lag the broader market.In some cases, due to its large cash reserves, stable buybacks and largest market capitalization, it has become a safe-haven stock for many investors who "can't afford to lag the broader market due to increased uncertainty at the moment".