$Microsoft(MSFT)$ My $380 Cash Secured Put (CSP) for MSFT expired last Friday, and with the shares trending just a hair below strike, I have officially taken assignment. Instead of rolling the position down and out, I decided to let the shares get put to me.
At these levels, I find the price highly attractive for entering a fresh long position. In fact, this entry is lower than my current average cost basis, making this a great opportunity to Dollar-Cost Average (DCA) down. The long-term playbook here is simple: I will hold onto this lower-value entry and look to systematically shave off my higher-priced holdings once the share price recovers.
The Landscape on MSFT Right Now:
The Bull Case: The stock has slid roughly 17% this year and is testing its 52-week low, pushing its trailing P/E down to a highly reasonable 22-23x (near a 5-year low multiple). Despite the price compression, operational demand remains massive, backed by a staggering $627B commercial remaining performance obligation (RPO) backlog. Management is heavily front-loading a projected $190B in CY2026 capex to shorten the time it takes to monetize AI at scale via Copilot and Azure.
The Bear Case: Near-term technical momentum remains heavily bearish, with the price stuck below its 50-day and 200-day moving averages and the RSI lingering in deeply oversold territory (sub-30). Sentiment has been dampened by a massive 206-vulnerability Patch Tuesday release that raised enterprise compliance jitters. Structurally, the EU’s proposed Cloud and AI Development Act (CADA) sovereignty framework is threatening to restrict US hyperscalers from sensitive public-sector contracts, while massive infrastructure capex continues to put short-term pressure on free-cash-flow yields.
Sitting on a great company at a multi-year low valuation multiple. Now, we let the long-term thesis play out. | Side | Price | Realized P&L |
|---|
| Buy Open | 380.00 | -0.23% Holding |
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