Microsoft (MSFT) AI Stock Analysis

• Market Cap: $3.66T
• Dividend Yield: 0.67%
• Average Volume (3M): 19.29M
• Price to Earnings (P/E): 38.0
• Beta (1Y): 1.01
• Revenue Growth: 14.13%
• EPS Growth: 12.10%
• Country: US
• Employees: 228,000
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 3.46
• Shares Outstanding: 7,432,544,000
• 10 Day Avg. Volume: 23,510,981
• 30 Day Avg. Volume: 19,293,684
• PEG Ratio: 9.18
• Price to Book (P/B): 11.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 53.30
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 3.62
• Enterprise Value/Gross Profit: 19.99
• Enterprise Value/Ebitda: 6.59
• 1Y Price Target: $524.86
• Price Target Upside: 6.88% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 34

• Rating: 83 Outperform
• Price Target: $558.00 ▲(13.62%Upside)

Microsoft's overall stock score is driven by its strong financial performance and positive earnings call sentiment. The company benefits from consistent revenue growth and high profitability, supported by effective cash flow management and a solid balance sheet. Technical indicators show positive momentum, although overbought conditions suggest caution. The high P/E ratio reflects market confidence but also hints at potential overvaluation. Continued strength in cloud and AI services positions Microsoft well for future growth.

Positive Factors

Azure Business Growth

Microsoft's prime position for the upcoming GenAI innovation cycle matched with solid execution is driving an acceleration in the Azure business.

Generative AI Investments

The yields on Microsoft's investments in Generative AI are becoming increasingly apparent, both in terms of direct monetization and driving further IT wallet share gains for the broader portfolio.

Revenue Projections

Raising Azure numbers lifts total Azure by $2 billion in FY26, contributing to an increased target price of $605.

Negative Factors

Long-term Growth Concerns

The outcome post 2030 could turn out better than many fear, with Azure continuing to be an important inferencing partner for OpenAI and Microsoft as a key strategic partner.

Market Forecasts

Conservatism in Azure forecasts supports the core conclusion of capex-implied AI revenue analysis.

Street Estimates

MSFT remains the top pick in software given its relative defensiveness in a choppy macro environment, AI product cycle, and reinforced conviction that Street estimates on Azure may be too low.

Microsoft Business Overview & Revenue Model

Company Description

Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. The company operates in three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment offers Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, Microsoft Viva, and Skype for Business; Skype, Outlook.com, OneDrive, and LinkedIn; and Dynamics 365, a set of cloud-based and on-premises business solutions for organizations and enterprise divisions. The Intelligent Cloud segment licenses SQL, Windows Servers, Visual Studio, System Center, and related Client Access Licenses; GitHub that provides a collaboration platform and code hosting service for developers; Nuance provides healthcare and enterprise AI solutions; and Azure, a cloud platform. It also offers enterprise support, Microsoft consulting, and nuance professional services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions; and training and certification on Microsoft products. The More Personal Computing segment provides Windows original equipment manufacturer (OEM) licensing and other non-volume licensing of the Windows operating system; Windows Commercial, such as volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; and Windows Internet of Things. It also offers Surface, PC accessories, PCs, tablets, gaming and entertainment consoles, and other devices; Gaming, including Xbox hardware, and Xbox content and services; video games and third-party video game royalties; and Search, including Bing and Microsoft advertising. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online stores, and retail stores. Microsoft Corporation was founded in 1975 and is headquartered in Redmond, Washington.

How the Company Makes Money

Microsoft makes money through a diverse revenue model that includes several key streams. The company earns significant income from its Productivity and Business Processes segment, which includes Microsoft Office subscriptions and LinkedIn. The Intelligent Cloud segment generates revenue from Azure, the company's cloud computing platform, as well as from server products and enterprise services. Additionally, Microsoft benefits from its More Personal Computing segment, which encompasses Windows licensing, Surface devices, and gaming, including Xbox hardware and software sales. Microsoft also engages in strategic partnerships and acquisitions that enhance its product offerings and expand its market reach, contributing to its overall earnings.

Microsoft Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	270.01B	245.12B	211.91B	198.27B	168.09B	143.01B
Gross Profit	186.51B	171.01B	146.05B	135.62B	115.86B	96.94B
EBITDA	150.06B	133.01B	105.14B	100.24B	85.13B	68.42B
Net Income	96.64B	88.14B	72.36B	72.74B	61.27B	44.28B
Balance Sheet
Total Assets	562.62B	512.16B	411.98B	364.84B	333.78B	301.31B
Cash, Cash Equivalents and Short-Term Investments	79.61B	75.53B	111.26B	104.75B	130.26B	136.53B
Total Debt	60.57B	67.13B	59.97B	61.27B	67.78B	71.00B
Total Liabilities	240.73B	243.69B	205.75B	198.30B	191.79B	183.01B
Stockholders Equity	321.89B	268.48B	206.22B	166.54B	141.99B	118.30B
Cash Flow
Free Cash Flow	69.36B	74.07B	59.48B	65.15B	56.12B	45.23B
Operating Cash Flow	130.71B	118.55B	87.58B	89.03B	76.74B	60.67B
Investing Cash Flow	-56.88B	-96.97B	-22.68B	-30.31B	-27.58B	-12.22B
Financing Cash Flow	-64.42B	-37.76B	-43.94B	-58.88B	-48.49B	-46.03B

Microsoft Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 491.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSFT, the sentiment is Positive. The current price of 491.09 is above the 20-day moving average (MA) of 481.46, above the 50-day MA of 453.06, and above the 200-day MA of 422.79, indicating a bullish trend. The MACD of 11.86 indicates Positive momentum. The RSI at 68.02 is Neutral, neither overbought nor oversold. The STOCH value of 74.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSFT.

Microsoft Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSFT	83 Outperform	$3.66T	38.02	33.61%	0.67%	14.13%	12.10%
FTNT	79 Outperform	$78.92B	43.52	205.91%	―	13.83%	58.13%
PANW	78 Outperform	$133.74B	117.10	21.16%	―	13.91%	-50.96%
ADBE	76 Outperform	$166.33B	25.07	52.25%	―	10.69%	40.10%
ORCL	76 Outperform	$615.02B	50.43	85.36%	0.91%	8.38%	16.96%
CRWD	74 Outperform	$122.65B	721.64	-5.76%	―	25.94%	-226.80%
Sector *	49 Neutral	C$2.92B	2.03	-80.91%	2.68%	6.62%	-18.96%

Microsoft Corporate Events

Microsoft Updates Bylaws to Enhance Shareholder Engagement

Microsoft Corporation’s Board of Directors has amended the company’s Bylaws, effective July 1, 2025, to introduce a cure process for deficiencies in director nomination notices submitted by shareholders. This change allows shareholders to rectify any issues in their nomination notices within a specified time, potentially impacting shareholder engagement and governance practices.

The most recent analyst rating on (MSFT) stock is a Buy with a $511.00 price target. To see the full list of analyst forecasts on Microsoft stock, see the MSFT Stock Forecast page.