Microsoft And Google Earnings: Peak Cash Flow?


  • The article discusses Microsoft’s FQ2 2023 and Alphabet’s full-year 2022 earnings, cash flows and recent events. I highlight the most important pillars in the two companies’ economic moats.
  • I will present my estimates for Microsoft’s and Alphabet’s actual free cash flow and critically discuss stock-based compensation expenses.
  • I will perform discounted cash flow-based valuation analyses that make sense of current stock prices and provide an understanding of what is currently being discounted.
  • In addition, I present sensitivity analyses to get a good understanding of what should happen to valuations if cash flow forecasts deviate upward or, heaven forbid, downward.
Man Getting Sick On A Rollercoaster



It’s undeniable that both Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) occupy a significant part of our daily lives and routines.

Take a look at your smartphone (assuming you don’t own an iPhone), open a Google search or watch a YouTube video, and

Disclosure: I/we have a beneficial long position in the shares of GOOGL, MCD, HD, LMT, PEP, PG, JNJ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The contents of this article and my comments are for informational purposes only and may not be considered investment and/or tax advice. I am neither a licensed investment advisor nor a licensed tax advisor. Furthermore, I am not an expert on taxes and related laws – neither in relation to the U.S. nor other geographies/jurisdictions. It is not my intention to give financial and/or tax advice and I am in no way qualified to do so. I cannot be held responsible and accept no liability whatsoever for any errors, omissions, or for consequences resulting from the enclosed information. The writing reflects my personal opinion at the time of writing. If you intend to invest in the stocks or other investment vehicles mentioned in this article – or in any form of investment vehicle generally – please consult your licensed investment advisor. If uncertain about tax-related implications, please consult your licensed tax advisor.

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