Upside case
Bull case
$718+89.1%
MSFT would need investors to value it at roughly 43x earnings — about 20x more generous than today's 23x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated Jun 18, 2026
Microsoft Corporation (MSFT) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
82
analysts
66 bullish · 0 bearish · 82 covering MSFT
Strong Buy
0
Buy
66
Hold
16
Sell
0
Strong Sell
0
Consensus Target
$552
+45.5% vs today
Scenario Range
$343 – $718
Model bear to bull value window
Coverage
82
Published analyst ratings
Valuation Context
22.6x
Forward P/E · Market cap $2.82T
MSFT price targets
Three scenarios for where MSFT stock could go
Current
~$379
Confidence
72 / 100
Updated
Jun 18, 2026
Where we are now
Current · $379
Bear
$343
Base
$545
Bull
$718
Market caseClosest to today
Base case
$545+43.6%
At 32x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$343-9.6%
If investor confidence fades or macro conditions deteriorate, a 2x multiple contraction could push MSFT down roughly 10% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Microsoft Corporation
MSFT · NASDAQTechnologySoftware - InfrastructureJune year-end
Microsoft is a global technology company that develops software, cloud services, and hardware products. It generates revenue primarily through cloud services like Azure (~40% of revenue), productivity software including Office 365 and Dynamics, and personal computing through Windows licensing and Surface devices. Its key competitive advantage is the deeply entrenched enterprise ecosystem—Windows and Office dominance creates a powerful network effect that drives adoption of its cloud and productivity suites.
Market Cap
$2.82T
Revenue TTM
$318.3B
Net Income TTM
$125.2B
Net Margin
39.3%
MSFT Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
100%Exceptional
12 quarters tracked
Revenue Beat Rate
100%Exceptional
vs consensus estimates
Avg EPS Surprise
+6.4%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 2025
EPS
$3.65/$3.37
Revenue
$76.4B/$73.9B
Q4 2025
EPS
$4.13/$3.67
Revenue
$77.7B/$75.5B
Q1 2026
EPS
$4.14/$3.90
Revenue
$81.3B/$80.3B
Q2 2026
EPS
$4.27/$4.06
Revenue
$82.9B/$81.4B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $3.65/$3.37 | +8.3% | $76.4B/$73.9B | +3.4% |
| Q4 2025 | $4.13/$3.67 | +12.5% | $77.7B/$75.5B | +2.9% |
| Q1 2026 | $4.14/$3.90 | +6.2% | $81.3B/$80.3B | +1.2% |
| Q2 2026 | $4.27/$4.06 | +5.2% | $82.9B/$81.4B | +1.8% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$346.3B
+8.8% YoY
FY2
$381.9B
+10.3% YoY
EPS Outlook
FY1
$17.31
+2.9% YoY
FY2
$19.58
+13.1% YoY
Trailing FCF (TTM)$72.9B
FCF Margin: 22.9%
Next Earnings
July 29, 2026
Expected EPS
$4.21
Expected Revenue
$87.6B
MSFT beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
MSFT Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $281.7B
Product Mix
Latest annual revenue by segment or product family
Server Products And Cloud Services
34.9%
+0.7% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
51.3%
+15.9% YoY
Tap, hover, or focus a slice to inspect segment detail.
Server Products And Cloud Services is the largest disclosed segment at 34.9% of FY 2025 revenue, up 0.7% YoY.
UNITED STATES is the largest reported region at 51.3%, up 15.9% YoY.
MSFT Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Cheap versus peers
Fair value est. $520 — implies +37.0% from today's price.
Upside to Fair Value
37.0%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
MSFT
27.8x
vs
S&P 500
24.4x
+14% premium
vs Technology Trailing P/E
MSFT
27.8x
vs
Technology
29.0x
In line with benchmark
vs MSFT 5Y Avg P/E
Today
27.8x
vs
5Y Average
34.0x
18% discount
Forward PE
22.6x
S&P 500
18.8x
+20%
Technology
22.3x
+1%
5Y Avg
—
—
Trailing PE
27.8x
S&P 500
24.4x
+14%
Technology
29.0x
-4%
5Y Avg
34.0x
-18%
PEG Ratio
1.48x
S&P 500
1.66x
-11%
Technology
1.51x
-2%
5Y Avg
—
—
EV/EBITDA
17.8x
S&P 500
15.2x
+17%
Technology
16.6x
+7%
5Y Avg
24.2x
-26%
Price/FCF
39.4x
S&P 500
20.7x
+90%
Technology
19.2x
+105%
5Y Avg
41.2x
-5%
Price/Sales
10.0x
S&P 500
3.1x
+224%
Technology
2.4x
+310%
5Y Avg
12.2x
-18%
Dividend Yield
0.85%
S&P 500
1.91%
-56%
Technology
1.11%
-23%
5Y Avg
0.76%
+11%
| Metric | MSFT | S&P 500 | Technology | 5Y Avg MSFT |
|---|---|---|---|---|
| Forward PE | 22.6x | 18.8x+20% | 22.3x | — |
| Trailing PE | 27.8x | 24.4x+14% | 29.0x | 34.0x-18% |
| PEG Ratio | 1.48x | 1.66x-11% | 1.51x | — |
| EV/EBITDA | 17.8x | 15.2x+17% | 16.6x | 24.2x-26% |
| Price/FCF | 39.4x | 20.7x+90% | 19.2x+105% | 41.2x |
| Price/Sales | 10.0x | 3.1x+224% | 2.4x+310% | 12.2x-18% |
| Dividend Yield | 0.85% | 1.91% | 1.11% | 0.76% |
MSFT trades above S&P 500 benchmarks on 5 of 6 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolMSFT Financial Health
Verdict
Exceptional
MSFT generates $72.9B in free cash flow at a 22.9% margin — 24.9% ROIC signals a durable competitive advantage · returns 1.5% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$318.3B
Revenue Growth
TTM vs prior year
+17.9%
Gross Margin
Gross profit as a share of revenue
68.3%
Operating Margin
Operating income divided by revenue
46.8%
Net Margin
Net income divided by revenue
39.3%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$16.82
Free Cash Flow (TTM)
Cash generation after capex
$72.9B
FCF Margin
FCF as share of revenue — the primary cash quality signal
22.9%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
24.9%
ROA
Return on assets, trailing twelve months
19.2%
Cash & Equivalents
Liquid assets on the balance sheet
$30.2B
Net Debt
Total debt minus cash
$81.9B
Debt Serviceability
Net debt as a multiple of annual free cash flow
1.1× FCF
~1.1 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
33.1%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
1.5%
Dividend
0.9%
Buyback
0.7%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$18.4B
Dividend / Share
Annualized trailing dividend per share
$3.23
Payout Ratio
Share of earnings distributed as dividends
23.6%
Shares Outstanding
Declining as buybacks retire shares
7.4B
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageMSFT Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated June 17, 2026
High Risk
Free Cash Flow Decline
MSFT's Q2 2026 showed a decline in free cash flow alongside surging CapEx of $37.5B, raising investor concerns about financial efficiency.
Medium
AI Bubble Risks
Market skeptics highlight the 'AI Bubble' as a potential risk, questioning the sustainability of MSFT's AI-driven growth.
Medium
Capital Expenditure Surge
A significant increase in CapEx to $37.5B may pressure margins and returns if not matched by proportional revenue growth.
Lower
Valuation Concerns
Some analysts project a modest decline in stock price, with AI models forecasting a target of $376.11 (-0.8% from current levels).
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why MSFT Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated June 17, 2026
AI monetization catalyst
Microsoft's capability to capitalize on generative AI through strategic assets like Azure and OpenAI exposure drives growth.
Azure cloud growth
Continued expansion and adoption of Microsoft's Azure cloud platform is a key driver of revenue and market leadership.
Microsoft 365 pricing power
Strong demand for Microsoft 365 and its productivity tools allows the company to maintain and increase pricing.
Copilot monetization
The integration and monetization of AI-powered Copilot across Microsoft's product suite present a significant growth opportunity.
Strategic acquisitions
Microsoft's disciplined approach to acquisitions strengthens its position in productivity software, gaming, cloud, and AI.
Leadership in productivity
Dominance in productivity software like Word, Excel, and Teams ensures recurring revenue and a wide moat.
Gaming segment strength
Xbox and gaming services contribute to diversified revenue streams and engagement across platforms.
Secular growth trends
Microsoft benefits from long-term trends in digital transformation, cloud adoption, and AI integration.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
MSFT Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$379.40
52W Range Position
12%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$356.28
+6.5% from the low
52-Week High
$555.45
-31.7% from the high
1 Month
-10.42%
3 Month
-3.16%
YTD
-19.8%
1 Year
-21.0%
3Y CAGR
+3.9%
5Y CAGR
+7.9%
10Y CAGR
+22.4%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
MSFT vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
22.6x
vs 25.9x median
-13% below peer median
Revenue Growth
+8.8%
vs +14.6% median
-40% below peer median
Net Margin
39.3%
vs 27.2% median
+45% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
MSF MSFT Microsoft Corporation | $2.82T | 22.6x | +8.8% | 39.3% | Buy | +45.5% |
AAP AAPL Apple Inc. | $4.38T | 34.0x | +6.8% | 27.2% | Buy | +9.6% |
GOO GOOGL Alphabet Inc. | $4.45T | 25.9x | +14.6% | 37.9% | Buy | +11.9% |
AMZ AMZN Amazon.com, Inc. | $2.63T | 27.8x | +11.4% | 12.2% | Buy | +25.9% |
MET META Meta Platforms, Inc. | $1.46T | 17.5x | +16.0% | 32.8% | Buy | +43.1% |
ORC ORCL Oracle Corporation | $530.1B | 22.9x | +15.9% | 25.4% | Buy | +37.5% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
MSFT Dividend and Capital Return
MSFT returns 1.5% total yield, led by a 0.85% dividend, raised 21 consecutive years. Buybacks add another 0.7%.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
1.5%
Dividend + buyback return per year
Buyback Yield
0.7%
Dividend Yield
0.85%
Payout Ratio
23.6%
How MSFT Splits Its Return
Div 0.85%
Buyback 0.7%
Dividend 0.85%Buybacks 0.7%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$3.23
Growth Streak
Consecutive years of dividend increases
21Y
3Y Div CAGR
10.2%
5Y Div CAGR
10.2%
Ex-Dividend Date
—
Payment Cadence
Quarterly
5 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$18.4B
Estimated Shares Retired
49M
Approx. Share Reduction
0.7%
Shares Outstanding
Current diluted share count from the screening snapshot
7.4B
At 0.7%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $2.73 | — | — | — |
| 2025 | $3.40 | +10.4% | 0.5% | 1.1% |
| 2024 | $3.08 | +10.4% | 0.5% | 1.2% |
| 2023 | $2.79 | +9.8% | 0.9% | 1.7% |
| 2022 | $2.54 | +10.4% | 1.7% | 2.6% |
FAQ
7 questionsMSFT Investor Questions
Common questions answered from live analyst data and company financials.
01Is Microsoft Corporation (MSFT) stock a buy or sell in 2026?
Microsoft Corporation (MSFT) is rated Buy by Wall Street analysts as of 2026. Of 82 analysts covering the stock, 66 rate it Buy or Strong Buy, 16 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $552, implying +45.5% from the current price of $379. The bear case scenario is $343 and the bull case is $718.
02What is the MSFT stock price target for 2026?
The Wall Street consensus price target for MSFT is $552 based on 82 analyst estimates. The high-end target is $680 (+79.2% from today), and the low-end target is $415 (+9.4%). The base case model target is $545.
03Is Microsoft Corporation (MSFT) stock overvalued in 2026?
MSFT trades at 22.6x times forward earnings. The stock's valuation is broadly in line with the broader market. Based on current multiples versus the peer group, the relative model signals cheap versus peers. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Microsoft Corporation (MSFT) stock in 2026?
The primary risks for MSFT in 2026 are: (1) Free Cash Flow Decline — MSFT's Q2 2026 showed a decline in free cash flow alongside surging CapEx of $37. (2) AI Bubble Risks — Market skeptics highlight the 'AI Bubble' as a potential risk, questioning the sustainability of MSFT's AI-driven growth. (3) Capital Expenditure Surge — A significant increase in CapEx to $37. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Microsoft Corporation's revenue and earnings forecast?
Analyst consensus estimates MSFT will report consensus revenue of $346.3B (+8.8% year-over-year) and EPS of $17.31 (+2.9% year-over-year) for the upcoming fiscal year. The following year, analysts project $381.9B in revenue.
06When does Microsoft Corporation (MSFT) report its next earnings?
Microsoft Corporation is expected to report its next earnings on approximately 2026-07-29. Consensus expects EPS of $4.21 and revenue of $87.6B. Over recent quarters, MSFT has beaten EPS estimates 100% of the time.
07How much free cash flow does Microsoft Corporation generate?
Microsoft Corporation (MSFT) generated $72.9B in free cash flow over the trailing twelve months — a free cash flow margin of 22.9%. MSFT returns capital to shareholders through dividends (0.9% yield) and share repurchases ($18.4B TTM).