Microsoft Corporation

MSFT

Stock Summary

Large-cap cloud and AI stalwart

Market-leading cloud and AI platform with broad enterprise software franchises; Mid-teens to low-20s growth expectations for revenue and EPS per internal models; Recent shareholder litigation and internal warnings on cash and inventory warrant attention.

Sector: TechnologyIndustry: Software - Infrastructure

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Valuation

Updated October 2026

Fairly Valued

Fair value band $330 to $571

$540

Type Of Stock

Stalwart

Very close fit

Microsoft combines durable, enterprise software franchises and market leadership in cloud and AI with steady, above-average growth. That mix fits a stalwart more than a pure fast grower or a cyclical business.

Industry Overview

Industry Health:Rising

Industry Mood:Fear

Industry Outlook:AI cloud demand still rising

Fresh October evidence still shows strong demand for AI infrastructure, cloud platforms and security software, even as buyers keep pressing vendors to prove real savings before expanding deployments.

Sector: Technology
Industry: Software - Infrastructure
Exchange: NASDAQ
IPO Date: Mar 13, 1986
Location: Washington, USA
Shares Outstanding: 7,428,434,704
Quarterly Report: Jul 31, 2026
Last Close: Oct 12, 2026

Price (USD)

540.15

EPS (TTM)

17.96

Market Cap (last close)

M Cap Rank

1 Week

+3.04%

1 Month

+9.18%

1 Year

+6.78%

HelloStocks Score

Overall Rating

7.5

Growth

5.6

Financial Strength

9.7

Value

7.2

Company Metrics

Key fundamentals vs peers

Growth

Metric	Compared to Sectorvs Sector
	Medium (bottom 49%)
	Low (bottom 28%)
	High (top 62%)
	Medium (top 54%)
	Medium (top 58%)
	Medium (top 56%)
	Medium (top 57%)
Growth Score: 5.6	High (top 69%)

Financial Strength

Metric	Compared to Sectorvs Sector
Gross Margin: 67.2%	High (top 72%)
Operating Margin: 46.8%	Very High (top 98%)
Net Margin: 40.3%	Very High (top 96%)
ROE: 33.2%	High (top 72%)
ROA: 19.4%	Very High (top 87%)
ROIC: 28.5%	High (top 72%)
Free Cash Flow (TTM): 67 billion	Very High (top 100%)
Debt to Equity: 0.13	Low (bottom 37%)
Book Value / Share: 59.55	Very High (top 94%)
Financial Strength Score: 9.7	Very High (top 98%)

Value

Metric	Compared to Sectorvs Sector
PE Ratio: 30.07	Medium (bottom 48%)
PB Ratio: 9.07	Very High (top 84%)
PS Ratio: 11.98	Very High (top 83%)
PEG (1Y trailing): 0.95	High (top 65%)
	Medium (bottom 44%)
Price to FCF: 59.34	Very High (top 84%)
FCF Yield: 1.7%	Very Low (bottom 15%)
Dividend Yield: 0.67%	Low (bottom 26%)
Value Score: 7.2	High (top 63%)
Upside to DAISY Fair Value: -16.6	Medium (top 51%)

Valuation Station

Two ways to value this stock

DAISY Earnings Audit

Your AI Earnings Auditor

Suggested Normalized EPS

17.28

Adjusted for one-time items

GAAP EPS

17.96

DAISY Summary

Over the latest four quarters, normalized EPS is 17.28 versus GAAP EPS of 17.96. The main adjustments identified from SEC filing reconciliations were openai investment impact.

DAISY Explanation

Adjustments Made (TTM total)

-OpenAI investment impact-1.09
+OpenAI investment impact+0.41

Quarterly EPS Breakdown

Quarter	Period End	GAAP	Adj Diluted	Adj Basic	DAISY
Q2 2026	Jun 30, 2026	4.81	5.16	5.18	4.74
Q1 2026	Mar 31, 2026	4.27	3.72	3.73	4.27
Q4 2025	Dec 31, 2025	5.16	3.65	3.67	4.14
Q3 2025	Sep 30, 2025	3.72	3.46	3.47	4.13
TTM		17.96	17.96	16.05	17.28

Earnings-Based Valuation

PE & PEG ratio built on normalized EPS

Priceeditable

Market: 540.15

EPS (TTM)editable

Reported: 17.96

Expected Annual EPS Growtheditable

DAISY base: 18%

P/E Ratiocalculated

31.26

Base: 30.07

PEG Ratio

The PEG ratio combines price-to-earnings with expected earnings growth to assess value. Formula: P/E ratio divided by expected annual earnings growth %.

1.74

Fair

01234+

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Metric Trends

Track fundamentals over time

PE Ratio — Price / Earnings (TTM).

Metric:

Current PE Ratio

—

Peer comparison

PE Ratio - Absolute value

PE Ratio - Percentile vs Sector

No percentile data

Financial Statements

Income, Cashflow & Balance Sheet

Income Statement

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Cashflow Statement

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Balance Sheet

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Warning Signs

Financial red flags & risk indicators

4 warnings

Decreasing cash YoY
Cash declined from 30.24 billion to 20.93 billion over the last year. Review cash and cash equivalents on the balance sheet for the decline.

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Sentiment Analysis

Market Mood

View the overall market sentiment.

Daily fear-to-greed scores and live mood charts are restricted to paid users.

Latest Market Mood

Market Mood

Overall market

Mood Restricted

Sector Mood

Technology

Mood Restricted

Industry Mood

Software - Infrastructure

Mood Restricted

Stock signals for MSFT

Current price: $540.15
52W high: —
52W low: —
RSI (14): —
20D momentum: —
60D momentum: —
30D volatility: —

HelloStocks Market Mood Index

Market sentiment measured on a 0-100 scale.

Restricted

Jun 25

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Mar 26

Jun 26

Market Mood chart restricted

Daily fear-to-greed scores update after each market close and are available to paid users.

Industry Outlook

Software - Infrastructure · Technology

DAISY OutlookAI cloud demand still rising

Fresh October evidence still shows strong demand for AI infrastructure, cloud platforms and security software, even as buyers keep pressing vendors to prove real savings before expanding deployments.

Long Term Annual Industry Growth

Low 11%High 25%

DAISY expects: 18%

Macro Environment

Mixed

The macro backdrop is helping and hurting at the same time. Companies still need cloud capacity, cyber protection and AI tools, but higher financing costs and tighter tech budgets make buyers slower to sign large, multi-year deals. The strongest spending is tied to projects that cut labor, improve security or support AI workloads that are already moving into production.

Competitive Dynamics

Expanding

Competition is expanding as large platforms, cloud providers and specialist vendors all race to own the AI infrastructure layer. Bigger players benefit from distribution, customer trust and bundled contracts, while smaller entrants can still win when they solve a narrow pain point quickly. Margins should improve for scaled vendors, but hosting costs and price competition can squeeze companies that rely heavily on third-party cloud capacity.

Growth Outlook

Expanding

Growth is still expanding because AI is moving from experiments into everyday developer, security, data and operations work. Cloud migrations also continue, with more software sold through cloud marketplaces and bundled into larger platform relationships. The catch is that customers are becoming more practical: pilots are easy to fund, but wider rollouts need a clear payoff.

Key Near-Term Risks

Elevated

The biggest risk is that AI projects fail to deliver savings or new revenue fast enough, causing customers to slow wider rollouts. A second risk is cloud cost pressure, because customers can cut unused capacity, delay migrations or demand better contract terms when bills rise too quickly. A major cyberattack, tighter data-location rules or stricter AI oversight could also slow adoption in finance, healthcare, government and other sensitive markets.