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Let's get back to Microsoft. Will the tech giant be able to deliver on those lofty AI expectations, and what should investors be looking for to help answer those questions? We're bringing in Ali Mogrobi, who is the senior equity analyst over at West End Capital Management here. And great to have you this morning. Let's just dive in on Microsoft. Of course, this is a company that's going to be continued to be annexed to this broader generative AI trade, considering some of their own investments. What are you anticipating as the company is going to have to answer questions about the level of those investments and whether or not they're at the peak of those or if the peak of those investments and that CapEx is behind it?

Yeah, that's, that's a good question. Um, you know, we, we still think that, uh, overall within the AI cycle, we're in probably still the early stages. So, uh, the, you know, CapEx for, for those guys for Microsoft and the other hyperscalers is probably still going to continue and create to, to grow, uh, a little bit again, demonstrating the continuing investment, uh, in AI. Um, you know, this is their Q4. Uh, it's very important for, for a tech, uh, Q4, you know, when their sales teams are, are driven, uh, the most to make their numbers. So, you know, if you're talking about AI on the cloud side, uh, you know, Google reported, as you know, 29% year of year growth, and that was a good sign for Microsoft. And remember, for Google, that was driven by AI, for which the training and inference requires, you know, very high computational capabilities. So, you know, the cloud providers, including Microsoft of course, will probably see demand for their cloud, um, you know, go up, thanks to AI. And, uh, so, so we're pretty optimistic, uh, on the, on the cloud slash AI front for, for Microsoft. And then going back to CapEx, you know, their guidance is very important, as we said, uh, it will give us a better idea about basically, you know, in what inning we're at when it comes to the AI cycle. Um, and just to give you an example, I'm sure you remember last week, you know, uh, Sundar Pichai, uh, CEO of Alphabet, he actually said, there may be over investments on that front, but that's actually much better than under investing and, and falling behind. So, uh, Microsoft probably has the same type of strategy going forward.

Ali, you mentioned that these reports are going to give us a better idea as to what, uh, inning we're in here when it comes to AI. Just from your assessment so far, the research that you've done, where do you think we are?

Uh, we'd probably say probably in the fourth, fifth innings. So still, you know, a little bit early. Um, you know, where most of the investments that we've seen are on the infrastructure side, right? Uh, expanding those data centers, building new data centers, uh, investing in the chips, of course, you know, the Nvidias and so forth. Um, and then the next phase, and this is mainly to, to prepare, um, to have the infrastructure for the training side of AI, AI. And the next phase is going to be the inference side, which is actually developing those really, those great tools to either help various firms monetize their products more effectively and or of course become, operate more efficiently, become more productive, and so forth. So that, that side of it, uh, I think is still to come. So again, I think we're still probably in the fourth, fifth inning.

So Ali, what, I guess my follow up there is what does that tell us just about whether or not there seems to be this debate playing out right now on Wall Street, whether or not the, uh, the earnings growth narrative has gotten ahead of itself, whether or not we're starting to see a shift in that narrative this earnings season. What's your read on that?

Um, I don't necessarily think it's gotten ahead of itself yet. Um, you know, again, Google's numbers were actually pretty good. So, uh, whether it was on the search side or whether it was on the cloud side, which again is indicative of, of continuing investments by their clients in, in AI. So, I don't necessarily think we have yet gotten ahead of ourselves here. Um, and of course, you know, the results, uh, from Microsoft, from meta this week, uh, and also from, from Apple and Amazon, uh, hopefully will support that.