Melius Research's Ben Reitzes Slams Satya Nadella Pivoting Microsoft To Being Model-Agnostic — 'What's He Talking About?'

• Reitzes called Microsoft’s strategy a mess, while saying that he wouldn’t want to invest in hyperscalers like these yet.
• The analyst also took aim at hyperscalers, saying that these companies are handing over money to other companies in the semiconductor sector.
• Reitzes said that companies adopting AI will “absolutely” trump those that are not, while noting that firms are realizing that their existing as well as new competitors are trouncing them in terms of revenue growth.

Melius Research’s Head of Technology Research, Ben Reitzes, on Tuesday slammed Microsoft Corp. (MSFT) CEO Satya Nadella’s pivot to a model-agnostic approach.

During an interview with CNBC, Reitzes said that Nadella’s comments suggest that Microsoft’s strategy with respect to AI is still occurring on the fly.

“They’re going to move to partial consumption, partial license… I mean, I don’t know about you David, but call me when they figure it out,” he said.

Microsoft shares were up nearly 2% in Tuesday morning’s trade.

Reitzes Calls Microsoft Strategy A ‘Mess’

Reitzes called Microsoft’s strategy a mess, while saying that he wouldn’t want to invest in hyperscalers like these yet.

“I don’t want to invest in that stuff while they’re still figuring out consumption versus subscription versus how much they spend,” he added.

The analyst also took aim at hyperscalers, saying that these companies are handing over money to other companies in the semiconductor sector.

Reitzes said that companies adopting AI will “absolutely” trump those that are not, while noting that firms are realizing that their existing as well as new competitors are trouncing them in terms of revenue growth.

What Did Nadella Say?

During an interview with The Wall Street Journal over the weekend, Nadella critiqued the dominance of AI giants OpenAI and Anthropic. Interestingly, Microsoft is one of the largest investors in OpenAI, and it has also taken a stake in Anthropic.

“You can’t say, hey, all white-collar jobs are gone and this could even be a weapon and we will use all the power to build data centers,” Nadella said.

He also made it clear that Microsoft is going to steer away from a future dictated and controlled by frontier AI model builders.

Reitzes Says He’s Telling His Clients To Buy The Dip

Reitzes said that he is telling his clients to buy stocks on the dip, while noting that these are similar to opportunities he has seen in the past.

“There’s a lot of things going on in Korea. Korea is where a lot of the memory is and a lot of these ETFs get crowded… but these types of things occur,” he added, referring to the selloff in memory stocks.

The Direxion Daily Semiconductor Bull 3X Shares (SOXL) ETF was down more than 23% at the time of writing, while the iShares Semiconductor ETF (SOXX) fell nearly 8%.

The Invesco QQQ Trust (QQQ) is up 36% over the past 12 months, while the iShares U.S. Technology ETF (IYW) is up 49%.

Also See: MU, INTC, AMD And Other AI Stocks Get Crushed — But Dan Ives Downplays Selloff, Morgan Stanley's Slimmon Calls Chip Stock Rout 'Healthy'

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