garrett nelson of cfra research, thank you for joining us.e are awaiting the start of the tesla earnings call so we will bring you headlines from that as we get them. on cloud business delivers. microsoft profit and sales beat estimates. this is bloomberg. ♪ taylor: microsoft second-quarter earnings coming in above the highest analyst estimates today, beating on both profits and sales. it seems to be all about the cloud coming in at $11.9 billion in revenue. how much market share are they taking from amazon? microsoft is the fastest-growing player in the cloud computing field. amazon is still the big dog in the fight with aws, but microsoft is coming on very strongly, a clear number two revealsehind aws and kind of bringing up the rear. -- and everybody else kind of bringing up the rear. is prettyzure astounding, even in the world of cloud computing. that enormous of contract, $10 billion, is there now and expectation that microsoft will continue to deliver big deals like this? how much more upside is there? lenn: a lot of it is derivative of

garrett nelson, the analyst, joins us on the phone now. we should sell it, garrett. >> sure, stuart. thanks a lot for having me. this stock, if you look back to last june, the stock price has more than tripled so it's had a really meateoric run-up and we think the valuation is looking quite frothy as these levels. we think the stock is trading at north of 50 times our 2021 earnings estimate, so the market is giving them plenty of credit for future growth which hasn't even happened yet, and that really raises execution risk. stuart: so where do you think the stock is going? >> sure. so our 12-month price target is $400. you know, a lot of the run-up, specifically that's happened in the last few weeks, we think is a result of short covering. so it's given the stock kind of a coiled spring effect. if you look back a few months, short interest was north of 20%. it has since come down to below 15%, so there's been a lot of capitulation from the shorts and they report earnings next wednesday. we think it's going to be very difficult for the stock

many of the analysts >> joining us right now for reaction to that comment and tesla's results is garrett nelson rush, who is senior research analyst at oppenheimer just raised his price target outperform rating. garrett just raised his price target as well to $440 from 400 but he has an active sell on that stock so this is a true bear/bull debate let's talk about where we come down on that and, garrett, i'll start with you, because i think elon musks comments were probably more targeted at you because you have a sell rating on the stock what do you think about what he said what do you think about the company's performance? why are you still rating this as sell >> sure. well, thanks for having me so we just moved to sell a few weeks ago because we thought at this point given this massive run-up which really started last june, the stock has really fundamentally overvalued at this point. i think you have to consider that the market cap now exceeds volkswagon, second largest auto maker in the world by market cap just behind toyota but, their sales last year were -- volkswagen sales were 30 times wh