The Investing for Beginners Podcast - Your Path to Financial Freedom Investing Insights: Microsoft & Watsco Earnings Analysis with Fiscal AI
Aug 7, 2025
The hosts dive deep into Microsoft's earnings, highlighting an impressive 18% revenue growth in cloud computing despite some concerns about margins. They compare Microsoft's position against rivals like Google and AWS, emphasizing the importance of long-term investments. Watsco's financial health is also scrutinized, noting its debt-free status and potential for growth in a fragmented market. The utility of Fiscal AI for analyzing these companies is a key focus, offering valuable insights for investors.
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Microsoft's Cloud AI Growth Surge
- Microsoft's cloud revenue topped $30 billion and grew 27%, showing strong AI-driven growth.
- Growing commercial bookings by 37% supports its position as a Fortune 500 commercial cloud leader.
Cloud Margin Dip Explained
- Microsoft's cloud gross margins dipped due to AI infrastructure investments and higher CapEx.
- Margin compression signals a growth phase investing in scaling AI and cloud capabilities.
Check Sales Mix Before Worrying
- When gross margins dip but cloud revenue grows fast, consider it's a sales mix shift toward lower-margin cloud.
- Validate assumptions by reviewing segment margin impact before concluding pricing power issues.
