MSFT Microsoft Corporation
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Daily prices, adjusted for splits. P/E and P/S value each day on the results published by then; a gap in P/E means the trailing year had no profit.
Software - Infrastructure · Redmond, WA · 223,000 employees · microsoft.com
Microsoft provides software, cloud computing solutions, and electronic devices to consumer and enterprise clients globally. It generates revenue by selling subscriptions and software licenses for productivity and operating systems, providing infrastructure and artificial intelligence services through its cloud platform, and marketing personal computers and gaming products.
Bull case
The business converts a healthy share of its revenue into free cash after accounting for stock compensation, while generating returns on capital well above its cost of capital. Its financial standing is backed by holding more cash than debt, alongside a contracted backlog that is expanding faster than revenue.
- Turns 16% of revenue into free cash after stock pay.
- Returns on capital run well above its cost of capital.
- Annual revenue growth rose from +15% to +18%.
- It holds more cash than debt and is profitable.
Bear case
The measurements do not currently make a case against the business, though the company would lose if industry spending on artificial intelligence outruns its returns or if electricity constraints restrict data-centre expansion.
- Trades at the 100th percentile of its own valuation history.
- The price assumes about +25% a year cash-flow growth, more than the +3% a year it delivered.
- Recent evidence on “AI spending is outrunning its returns” works against it.
- Recent evidence on “Power constraints are slowing data-centre expansion” works against it.
Features
- V-OVERVALUED Overvalued The price is 49% above its own-history reference value.
- V-WIDE-MOAT Wide moat Returns on capital run well above its cost of capital.
- V-ACCELERATING Growth accelerating Annual revenue growth rose from +15% to +18%. Shared by most companies we track
- H-FORTRESS Fortress balance sheet It holds more cash than debt and is profitable.
- F-BACKLOG-VELOCITY Backlog outpacing revenue Contracted backlog grew +82% over the year, against +18% for revenue.
AI impact
Supplies what AI runs on Tailwind
The company provides cloud computing capacity and productivity software that are central to developing and running artificial intelligence. While expanding demand to train and host AI workloads drives its cloud infrastructure business, competition from rival platforms and open-source models risks commoditizing AI services and pressuring profit margins.
Where AI helps it
- Sells what AI workloads consume
Where AI could hurt it
- AI tools could do part of what it sells (minor)
- AI makes it cheaper for rivals to build what it sells (minor)
In the company's words
Azure revenue is mainly affected by infrastructure-as-a-service and platform-as-a-service consumption-based services.
Competitors to Office include software and global application vendors, web-based and mobile application companies, AI-first application companies, as well as local application developers.
Assessed by AI from the company's own annual report filed 29 Jul 2026. A reading of the business, not a forecast or a recommendation.
Valuation position
MSFT is at the 100th percentile of its own valuation history. This is a relative measurement, not a price target or recommendation, and it assumes the business is still the one its history describes.
Price ladder
The measured price sits in the Above reference zone. These are reference zones, not buy instructions or forecasts that the prices will be reached.
What the price assumes
The measured price implies roughly +24.7% annual cash-flow growth, between +16.9% and +30.6% under other reasonable assumptions. Over the last three years it delivered +3.1% a year.
An estimate that depends on its assumptions, not a forecast.
Quality versus peers
Each dimension is shown on its own; they are not combined into a score.
Current analyst snapshot
Shown for reference only; not used in any measurement.
What would have to break
- Not triggered — Revenue decline
- Not triggered — Margin break
- Not triggered — Cash burn with rising debt
- Not triggered — Heavy dilution
- Not triggered — Warning language in filings
News
No recent brief on this company.