Microsoft Corporation
Mega Cap · Technology · Software - Infrastructure
$495.42−$1.46 (-0.29%)
Microsoft Corporation
Mega Cap · Technology · Software - Infrastructure
$495.42−$1.46 (-0.29%)
Stock analysis
Accumulate
HIGH CONVICTION
- Azure’s 41% growth and more than $100 billion in revenue show Microsoft is converting AI demand into a large, expanding business.
- Microsoft’s 18% FY2026 revenue growth gives analysts a stronger reason to raise profit forecasts as cloud demand expands.
Past performance
3M
+18.8%
6M
+27.0%
1Y
-4.0%
Set alerts
Add zonebelow $495
Trim zoneabove $559
Support · Pivot
$435
12.2% belowResistance · R1
$497
0.2% aboveUnderstand MSFT
1.How does the business make money?Microsoft earns most of its money from recurring software subscriptions, especially Microsoft 365 and related business tools, plus cloud services through Azure. It also makes money from Windows, gaming, search advertising, devices, consulting, and enterprise software, giving it several large but connected businesses.
2.How are the financials doing?The business is performing strongly, with healthy double-digit sales growth and even faster earnings growth recently. Profit margins remain unusually high, the balance sheet has more cash than debt, and cash generation is robust, although heavy data-center spending is becoming a bigger demand on cash.
3.What is the market expecting?Investors and analysts are largely expecting Microsoft to keep expanding through Azure and artificial intelligence, with earnings continuing to grow at a solid pace. The shares already reflect substantial confidence in that outlook, so the market will likely want continued evidence that AI spending is producing profitable cloud demand.
4.What’s helping the business grow?Azure is the main growth engine, as businesses increasingly move computing and data to the cloud and add AI services. Microsoft also benefits from its broad enterprise customer base, cross-selling across Microsoft 365, Azure, security, and business applications, while its software ecosystem makes customers less likely to switch.
5.What could hurt the business?Microsoft could spend too aggressively on data centers before AI and cloud demand generate enough profit, putting pressure on cash flow. Competition from Amazon, Google, and other AI providers, tighter regulation, weaker technology spending, cybersecurity problems, and a market shift away from expensive technology shares could also weigh on results or investor confidence.
Stock Fundamentals & Key Indicators
52-week range
Low$349.20
High$555.45
Today $495.42
RSI (14)
84.9Overbought
03070100
Overall score
82/100
Reported growth
Revenue growth (TTM)17.9
Sales are growing below the sector average of 23.5%, meaning the business is losing ground to peers.
EPS growth (TTM)29.6
Profit per share is growing below the sector average of 33.4%.
EPS growth (Q/Q)23.3
Earnings grew at a strong pace versus last quarter.
Forward outlook
EPS forecast (5Y)18.7
Analysts expect earnings growth below the sector average of 39.4% over the next 5 years.
EPS next year15.8
Analysts expect a strong pace of earnings growth next year.
Analyst Rating and Sentiment
Analyst price targets
Lowest
$400
Current price
$495.42
Median target
$550
Highest
$870
LowHigh
Reddit buzz
bullish335 posts about MSFT
62/100
constructive
Microsoft is described as undervalued because the market may not be fully crediting its 27% OpenAI stake and associated strategic rights. A separate large-position trade that generated a $340,000 gain reinforces the strong speculative and fundamental interest in the stock.
Talking points
- 27% ownership stake in OpenAI
- Potential value from an OpenAI IPO
- Long-term exclusive cloud and API partnership terms
Operating Record
Revenue
Business mix
Jun 30, 2026Productivity and Business Processes42.1% · $140.0B
Intelligent Cloud41.5% · $137.8B
More Personal Computing16.4% · $54.6B
What's working
- Cash exceeds debt by $20.0B, leaving a net cash buffer, a good sign.
- Forward P/E: Investors aren't pricing in much earnings growth, so there's room to be pleasantly surprised.
What to watch
- Price / sales: Revenue alone can't justify this price; profits need to catch up fast.
- Price / FCF: Cash generation hasn't caught up to the price tag yet.
What the market charges
Forward P/E
Favorable · 27% below avg
25.41x
Price / sales
Rich · Priced well above what its revenue alone supports
11.19x
Price / FCF
Rich · Priced far above what its cash flow currently supports
55.42x
EV / EBITDA
Reasonable · Operating earnings make this price a stretch but plausible
19.43x
How efficiently it compounds
ROIC
Strong · Comfortably clears the bar for efficient capital use
26.2%
ROE
Favorable · 34.0% - strong capital efficiency
34.0%
Debt / equity
Favorable · 0.30 - strong leverage
0.29x
Current ratio
Reasonable · Just enough on hand to cover near-term bills
1.23x
Peer Comparison
| Company | Mkt cap | P/E | Rev growth | Score |
|---|---|---|---|---|
| $3.71T | 27.9 | +17.8% | 82 |
 | $991.12B | 19.9 | +167.0% | 93 |
 | $5.42T | 34.3 | +70.7% | 87 |
 | $2.18T | 30.3 | +30.6% | 83 |
 | $46.60B | 100.8 | +205.7% | 83 |
What is moving MSFT
News
1d ago · Microsoft Corporation via Yahoo FinanceTiger Global Management cuts stakes in Big Tech, buys into SpaceX
Mixed
1d ago · Adobe Inc. via Yahoo Finance
Adobe Stock Eyes Rebound. Is This a Golden AI Opportunity?
Bullish
1d ago · Salesforce, Inc. via Yahoo Finance
JPMorgan Turns Bullish on Salesforce as the Stock Runs Three Straight Weeks
Bullish
1d ago · Oracle Corporation via NasdaqOracle Expands AI Database Offerings Through AWS Cloud: What's Ahead?
Bullish
1d ago · Seeking Alpha
Dividend Roundup: Microsoft, Chevron, Dow, Chubb, and more - Seeking Alpha
Mixed- 1d ago · Microsoft Corporation via Seeking Alpha
Dividend Roundup: Microsoft, Chevron, Dow, Chubb, and more
Bearish - 1d ago · Seeking Alpha
Microsoft: The $678 Billion Answer To The AI Skeptics (NASDAQ:MSFT) - Seeking Alpha
Bullish