Diversification is insulating the shares
Microsoft’s business mix is another reason its shares have held up better than many AI-related stocks.
The company generated $92.3 billion of quarterly revenue, but only part of that came directly from the most speculative areas of the AI trade. Its business spans Azure, Microsoft 365, LinkedIn, gaming, search advertising, Windows and enterprise software.
Even the weaker parts of the business provide diversification. Devices and Consumer revenue fell 3% in the latest quarter, but search and advertising revenue increased 12%.
This makes Microsoft less dependent on a single AI spending cycle than semiconductor manufacturers, data-centre operators or smaller AI infrastructure companies.
The distinction is important because last week’s sell-off was driven partly by concerns that political opposition, higher financing costs and local resistance could slow the construction of new data centres. Those risks are much more damaging to companies whose valuations depend almost entirely on continued infrastructure expansion.
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