The alpha, twice a week
That was 3 min.
Get the best new moments in your inbox every Wednesday and Saturday. It's free.
Check your inbox
We sent a link to your address. Click it to finish signing up. Not there in a minute? Look in spam.
or
Prof G Markets · 3 min · Apr 30, 2026
Microsoft is cheaper despite similar growth
Gil Luria compares the companies’ forward multiples and says Microsoft is not getting credit for comparable growth.
In this episode
Full analysis- 13:09Diversification matters more than timing in a stagflationary cycle4 min
- 9:19Dalio sees a riskier U.S. transition as debt demand weakensPro pick 4 min
- 18:59AI cloud leaders are earning returns on rising capex4 min
- 24:27Microsoft is cheaper despite similar growth3 min
- 4:43Dalio sees a return to power-based world order3 min
“They're all growing in the high teens and Microsoft is not getting the credit for it.”
Takeaways
- Microsoft trades in the low 20s forward earnings, versus higher multiples for Google and Amazon.
- Luria says software pessimism and capex concerns weigh on Microsoft’s valuation.
- He attributes slower data-center construction to bottlenecks that may push capex into later quarters.
About this segment
Gil Luria compares the companies’ forward multiples and says Microsoft is not getting credit for comparable growth. He says slower capex may reflect data-center bottlenecks, not a change in spending plans.
From “Ray Dalio: The World Order Has Unraveled”, Apr 30, 2026. Watch the full episode
Thanks. We'll look at and fix what's off.
Transcript
Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.
- 24:39
which doesn't look like it's in the cards right now. Are there any of these companies that stand out to you from a valuation perspective at this point? Do these earnings maybe give any detail or color on how we should feel about the valuations? Yeah, Microsoft really stands out. I mean, Google, by the time it opens for trading tomorrow and Amazon are trading at high 20s or even in the 30s on an afford multiple while Microsoft is trading in the low 20s in spite of the fact that they overall have comparable growth rates. They're all growing in the high teens and Microsoft is not getting the credit for it. Part of it is that there's a software business there.
- 25:17
People are very down on software, as you've discussed many times on your show. And then there's all the CapEx concerns. But from a valuation perspective, Google and Amazon trading at relatively high multiples, Microsoft still at a low multiple. That's why I prefer them. Meta is also trading at a low multiple. But again, part of it is this lack of discipline around spending, which investors are reluctant to embrace, especially right now.
- 25:44
What do you make of Microsoft actually, the capex coming in lower than expected? It seems like Microsoft might be pulling back or at least compared to Meta in terms of investments in AI? Or is that the wrong read? It's more likely has to do with the bottlenecks of building out data centers right now. There's so much competition for resources. We heard from Intel last week that they had to take some CPUs out of the trash in order to meet demand. We can look at memory prices quadrupling within a year. And we're seeing all these bottlenecks. I mentioned turbines and power generation and advanced packaging. There's all these bottlenecks. There's states that have of this NIMBY approach of we don't want a data center here and we're not gonna allow data centers.
- 26:29
All these companies are encountering it at one level or another for Microsoft that just ended up slowing down the rate. of data center construction, but given the size of demand, given the growth in demand, it's probably just a matter of pushing those data center into future quarters as opposed to reducing CapEx as a policy. All right. Big week. Gil Luria,