Wedgewood Partners’ Views on Microsoft’s (MSFT) Capital Expenditure

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Soumya Eswaran

Fri, July 17, 2026 astatine 8:49 AM CDT 3 min read

Wedgewood Partners, an concern absorption company, released its first-quarter 2026 capitalist letter. A transcript of the missive tin beryllium downloaded here. Wedgewood Composite delivered a nett instrumentality of 9.4% successful the 2nd 4th compared to 15.2% for the Standard & Poor's 500 Index, 16.7% for the Russell 1000 Growth Index, and 13.9% for the Russell 1000 Value Index. The steadfast is optimistic astir the semipermanent maturation of hyperscalers and has accrued its investments successful this sector, citing their important net imaginable and important relation successful AI adoption. Capital has besides been redirected towards exertion hardware stocks, particularly semiconductors, which present marque up a larger stock of the S&P 500 Index. Semiconductor stocks person benefited from hyperscalers' spending, but the steadfast expresses caution astir cyclical hazard and volatility. However, the momentum-driven marketplace negatively affected the Wedgewood fund's high-quality stocks, starring to a 25% instrumentality implicit the past 15 months, importantly underperforming the 90% summation of the S&P 500 Momentum ETF (SPMO). In addition, delight cheque the Fund's apical 5 holdings to cognize its champion picks successful 2026.

In its Q2 2026 capitalist letter, Wedgewood Partners highlighted Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is simply a multinational bundle institution that develops and supports software, services, devices, and solutions, holding ascendant positions successful software, unreality infrastructure, generative AI, and gaming. On July 16, 2026, Microsoft Corporation (NASDAQ:MSFT) closed astatine $401.10 per share. One-month instrumentality of Microsoft Corporation (NASDAQ:MSFT) was 3.55%, and its shares mislaid 22.77% implicit the past 52 weeks. Microsoft Corporation (NASDAQ:MSFT) has a marketplace capitalization of $2.98 trillion.

Wedgewood Partners stated the pursuing regarding Microsoft Corporation (NASDAQ:MSFT) successful its Q2 2026 capitalist update:

"Although Microsoft Corporation (NASDAQ:MSFT), Amazon, and Meta person antithetic concern models and were not needfully apical drivers of show during the quarter, we presumption their concern accidental set, from some a compounding and returns position and a component-cost hedge perspective, arsenic akin to Alphabet's.

Microsoft ended the astir caller 4th with mean gross assets of much than $585 cardinal (trailing 2 years), up 22%, yet generated $170 cardinal successful gross currency travel implicit the anterior 4 quarters, up 27% from a twelvemonth ago. Again, these are astonishing figures: Microsoft added an mean of $100 cardinal successful assets and $27 cardinal successful incremental currency flows. The Company is achieving astir 30% returns portion compounding the assets that make those returns astatine much than 20% - extraordinary! On apical of that, Microsoft reportedly has an concern successful OpenAI worthy implicit $100 billion, truthful we deliberation these immense concern gains, if realized, besides efficaciously service arsenic a hedge against commodity inflation, peculiarly incremental DRAM related capex implicit the coming years."

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