Following Microsoft's (MSFT) Q4 earnings report, the company's shares surged, adding $450 billion to its market capitalization in a single trading day. CNBC contributor Mike Khouw notes that with the immediate earnings event risk behind, the company's fundamental engine remains intact despite elevated AI capital expenditure.

Khouw suggests an income trade strategy: selling the August 21st weekly $412.50/$485 short strangle. This trade aims to capture a $7.30 combined premium, which translates to an approximate 1.6% absolute return or yield over 21 days, or an annualized rate of return of about 28%. He bases this on Microsoft's current valuation of approximately 22.6 times forward earnings, which sits at the midpoint of its 20-year range, suggesting neither a sustained breakdown nor a compelling breakout.