☕ Is Microsoft in trouble? – only if you ask the Chicken Little Brigade

Howdy! 👋 

The markets were off to a good start early, then came the ADP jobs report which showed that private payrolls dropped by 32,000. 

Treasury yields dropped immediately and - if you recall yesterday’s discussion about the cost of money – you know why. (See #1) 

What now? 

That depends on “flow” – something else we’ve been talking about a lot in recent weeks. 

A rising tide raises all boats just as an ebb tide causes ‘em to retreat. 

There’s plenty of profit potential in both directions! 

I think there’s a good case that buyers return quickly and possibly even by the time you read this.  

Short term SPX calls or a speculative leveraged index fund for the day may be interesting – hmmm. 🧐 

Longer term, you know the drill. 

Buy the best, ignore the rest. 

Here’s my playbook. 

1 – A speed round: markets, mayhem and money 

My good friend and colleague Scott “the Cow Guy” – so named for his old school pit jacket – kindly invited me back to talk about all sorts of things that you may find interesting.  

Some of what we covered: pop or drop, bitcoin, Musk’s latest and more. (Watch) 

Enjoy! 

2 – CrowdStrike sticks it to skeptics (again) 

I told the super-savvy Stuart Varney Monday that CrowdStrike was the one to watch this week when it comes to earnings. (Watch)  

I called out 4 things to watch closely… cyber security is a global priority, CEOs are in blank check mode, the company is at the top of the leaderboard and yes, it can go a lot higher. 

I mighta been on to something. 😎 

CrowdStrike just delivered one of the best quarters in company history. (Read) 

• Record net new ARR of $265 million — up 73% YoY 

• Ending ARR of $4.92 billion — up 23% YoY 

• Total revenue hit $1.23B, up 22%. 

• Free cash flow hit $296M — another record. 

• Customer adoption of six, seven, and eight modules hit new highs.  

• Raised full-year guidance again. “Sharply higher over the next three to five years — not immediately, but definitely.” 

Today’s earnings reinforce exactly why I said that. 

Not for nothing but the stock is up ~140% since the lows put in following the “CrowdStrike” global incident in the summer of ’24 when I told you point blank that a) the naysayers would pay a terrible price for selling out and b) to buy “in” if you were serious. 

I hope you paid attention. 

The game is just getting started, imho. 

And, btw, you know where to find me if you’d like some help with the playbook or a kick in the keister if you’re uncertain about what to buy next, why and how. I’ve got a few ideas. 

3 – MicroStrategy just admitted what nobody thought they’d ever say out loud 

MicroStrategy — now calling itself “Strategy Inc.” — is finally learning what happens when your entire business model is a leveraged Bitcoin trade wearing a software-company costume. 

Bitcoin’s fall from ~$126,000 to the mid-$80,000s torched the company’s stock (down 40–60% depending on which day you measure). 

Now the company is openly warning it could lose up to $5.5 billion this year if Bitcoin doesn’t bounce.  

With a “B” – ouch! 🤦‍♂️ 

For the first time ever, management has created a $1.44B U.S. dollar reserve just to make sure the company can meet its obligations, not to mention the vig on the $8.2B in convertible debt they used to buy all that Bitcoin in the first place. 

Here’s the tell. 

They now admit that if their market mNAV – market NAV - drops below 1X — or gets near the “danger zone” at 0.9 — they may have to start selling Bitcoin.  

So much for Saylor’s “we will never sell” mantra.  

When your collateral erodes and your lenders tighten the screws, philosophy gets replaced by math real fast. MSCI is even reportedly reviewing the stock for possible index exclusion, which could spark billions in forced outflows from passive funds. 

MyPOV: MicroStrategy isn’t trading like a software company anymore — it’s trading like a leveraged Bitcoin ETF with a payroll. That’s dangerous in a market full of forced liquidations, rising rates, China crackdowns, and risk-off sentiment. And unsuspecting investors who get burned risk the kind of re-entry that doesn’t exactly get talked about at cocktail parties. 

One more leg down and the company that preached HODL may wind up doing BFDL (bailing for dear life). A few speculative putskies could be spicy. 🤔 

So, too, for calls if there’s a rebound!  

Keith’s Investing Tip: Do NOT make the mistake of thinking you’re investing when the markets could easily prove you’re speculating.

4 – Is Microsoft in trouble? – only if you ask the Chicken Little Brigade 

There’s a report out from The Information that Microsoft sales quotas have been lowered for AI software sales. (Read) 

Shares are sinking as I type because the presumption is that this is bad. 

My reaction? 

I’ll take that bet all day long. 

Reports like this are a dime a dozen but try telling that to the “Chicken Little Brigade.” 🤦‍ 

The question you want to ask yourself is what other reasons could there be for lowering quotas.  

My experience is plenty. 

Quotas can get tweaked for 100 reasons that have nothing to do with weakening demand. And often do. 

Here are three from the real world to get your brain started: 

• Sales cycles are accelerating, meaning reps don’t need monster quotas to beat plan 

• Product bundling is shifting, especially as Copilot adoption hits escape velocity 

• Microsoft is rebalancing incentives, pushing field teams toward high margin recurring revenue 

AI isn’t slowing down and it’s sure as heck not going away. 

🛒 I think the company re-accelerates when the real story comes out and enterprise budgets reset in Q1 ’26. 

Keith’s Investing Tip: Keith’s Rule of the Back Page applies in spades – meaning that the real story and the investable opportunity is found on the back pages, not the front pages and especially not with reports like the one in question from The Information… to which Microsoft has declined to respond btw. 

Do your portfolio a favor. 

Buy the best, ignore the rest. 

5 – Why China’s gonna LOVE new US fuel standards (and how to invest before everybody else figures that out) 

US President Donald Trump wants tougher fuel standards for gas-powered cars, and he's about to raise the bar. (Read) 

Great... right??!! 

If I'm being honest, this kind of short-sighted thinking makes my head explode. 

Not because automakers can’t meet them.  

In fact, every major manufacturer on the planet could likely hit these targets tomorrow before lunch if they actually wanted to.  

That’s not the issue. 

The real story — the one nobody in D.C. seems capable of seeing — is abundance... something we've talked about many times. 

Here's why. 

While we’re arguing over miles-per-gallon like it’s 1997, China is building solar so fast that it’s adding more capacity in a single year than the U.S. manages in several.  

Put another way. 

Beijing is sprinting toward energy surplus.  

Once they’ve got more electrons than they can use, Beijing can simply reprioritize all the leftover dinosaur juice — instead of struggling to import it, refine it, or fight over it.  

That’s a massive geopolitical advantage no matter how you cut it. 

… Financially. 

… Strategically. 

… Militarily. 

Energy abundance = leverage over anybody who doesn't have it. 

Here’s the part most investors are missing… this sets up an investable opening that goes far beyond our borders and far beyond solar. 

Think about it. 

When a nation - any nation - moves into surplus energy territory, it can funnel capital into power-heavy industries the rest of the world will not be able to touch cost‑effectively. 

A few examples come to mind right off the top of my head including next‑gen manufacturing, AI data centers, rare‑earth processing, and industrial automation.  

That’s where the long‑tail opportunity lives and profits reside – which is why you and I want to pay very careful attention as investors. 

You know who gets it. 

Yep, him… as in Unka Elon. 

Be sure you do, too! 

Buy where electrons are cheapest. 

Keith's Investing Tip: History shows very clearly that abundance is a freight train you want to be in front of — not under. 

Bottom Line   

Tune out the noise.   

Keep your eye on the prize.   

Your portfolio will thank you. 

You got this – I promise! 💯 

As always, let’s MAKE it a great day. 

Keith 😀