A Deep Dive Analysis into MSFT's Current Valuation
Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three equally sized broad segments: productivity and business processes (legacy Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server), and more personal computing (Windows Client, Xbox, Bing search, display advertising, and Surface laptops, tablets, and desktops).
MSFT's stock price is driven by both fundamental growth factors and compelling market narratives that shape investor sentiment.
Microsoft has established itself as the enterprise AI platform leader through its OpenAI partnership, Copilot suite, and Azure's comprehensive AI infrastructure, creating a first-mover advantage in enterprise AI monetization.
Azure continues strong growth driven by enterprise AI adoption, with cloud infrastructure demand accelerating as companies build and deploy AI applications at scale.
Microsoft is transforming its commercial software business through AI integration, with Copilot driving productivity gains and new revenue streams across Office, Dynamics, and developer tools.
$474.96
As of 6/13/2025
$3513.7B
Enterprise Value
$258.9B
Based on Q3 2024
At MSFT's current market cap of $3513.7B, the market is pricing in moderately higher growth than current rates. Let's examine if these expectations are realistic using a discounted cash flow (DCF) analysis to determine fundamental value.
Market Expectations: The market is pricing in 18% growth, moderately above MSFT's current 15.0% growth rate.
This implies investors expect MSFT to maintain or slightly accelerate its current growth trajectory, which seems plausible given the company's market position and execution, though not guaranteed.
$3063.9B
Based on your growth and margin assumptions