‘A Screaming Deal,’ Says Top Investor About Microsoft Stock

The winter months weren’t fun ones for investors in Microsoft (NASDAQ:MSFT), who saw their holdings shrink in value. Indeed, MSFT ran headfirst into sector-specific worries and a broader reckoning that pushed share prices down across the board.

MSFT is down in the high teens for the year, and that’s including a recent market-wide uptick following a ceasefire in the Middle East. Microsoft’s massive increase in capex spending last quarter – $37.5 billion, up 66% year-over-year – startled investors, especially as some two-thirds went toward short-term assets such as CPUs and GPUs. That fed into larger worries that the exuberant AI spending could lead to a bubble.

Not everyone was scared off, however. There’s quite a bull case to be made when it comes to AI, supporting the megabucks Microsoft is spending to build out its capabilities. That’s the narrative top investor Keithen Drury is latching onto in support of his investment case.

“Microsoft is positioning itself as the go-to company for AI workloads,” exclaims the 5-star investor, who is among the top 2% of stock pros covered by TipRanks.

Drury argues that there are few long-term trends that will be more consequential than AI. That should help lead Microsoft to hit “market-crushing” gains in the coming years.

He points out that Microsoft is working to integrate AI throughout its family of apps, allowing its users to incorporate AI computing into their daily tasks. This approach is succeeding, according to Drury, who cites Microsoft’s 17% revenue growth last quarter. However, it was Azure that stole the show, delivering a 39% increase in sales.

“If that was all the information I gave you, you’d think Microsoft’s stock would be valued at a reasonable level and not too far off its all-time highs, but you’d be wrong,” adds Drury.

In fact, the opposite phenomenon occurred. Drury notes that Microsoft has been plummeting and has fallen far below its October record high (“and there isn’t really one good reason why”).

Now that it’s trading at multi-year lows, Drury thinks the investment decision is clear-cut.

“Not only is Microsoft a smart long-term AI investment pick, but it’s also a screaming value right now, making it a top buy in the stock market,” concludes Drury. (To watch Drury’s track record, click here)

That’s the spirit on Wall Street as well. With 35 Buys and 3 Holds, MSFT soars to a Strong Buy consensus rating. Its 12-month average price target of $573.41 would translate into gains north of 40% in the year ahead. (See MSFT stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.