I found a very good analysis of Microsoft regarding to its AI opportunity recently, which again confirmed my view about the unique competitive advantage provided by the ecosystem the company had 12 years ago. Look into the following link for the analysis. https://finance.yahoo.com/technology/ai/articles/microsoft-665-target-hinges-ai-223300589.html
When I first bought the Microsoft shares, it was considered a failing company by the market at the dawn of smart mobile phone era and punished harshly by the market. The Microsoft smart phone business was a disaster for the company. Acquiring Nokia’s phone business made the situation even worse by the ex-CEO Steve Ballmer.
At the time, I waked up one morning, thinking what a huge mistake the company had made and that I wanted to write a letter to the then chairman of the board Bill Gates. I wanted to tell him that his company was moving towards a totally wrong direction and it should focus on business sector where it had an ecosystem nobody could bypass and compete with.
I didn’t write the letter and bought it’s shares instead because a few days later, I heard the news that the company was looking for a new CEO. I thought that Mr. Nadella should be the best candidate after reviewing the list of the potential candidate for the new CEO because he was the leader in its cloud business and that anyone else could lead the business towards a better position than Mr. Ballmer, so long the new guy won’t stubbornly keep going on the current track, which was very much unlikely at the time. Who wants to going into a obviously dead-end road!
Mr. Buffett had a famous line, “I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” Although Microsoft did need someone more than an idiot, but its unique competitive advantage in the enterprise market was no one’s match. I considered Microsoft was not only the very kind of business in Buffett’s mind and also had great growth potential at the frontier of high tech. The only thing it needed to do was simply focus on its core business.
Sure enough, Mr. Nadella steered the giant ship towards the right direction and then exceeded my expectation after becoming the new CEO.
However, Mr. Buffett never bought any of his good friend’s company’s shares even at that very opportunity.
Mr. Ballmer became the No.9 richest person in the world on The World’s Real-Time Billionaires list by Forbes published on Qct 8 2026 by simply holding on all the Microsoft shares since leaving the CEO role in 2014.
It also has become another ten-bagger for me. It’s almost a company you can hold forever. That said, it doesn’t mean it will not drop dramatically due to market conditions. But I am quite sure that it will always come back stronger.