Fundamentals snapshot
MSFT · NMS · Technology · Software - Infrastructure
Current price
$416.67
52-week range
$356.28 - $555.45
Market cap
$3.10T
One-glance verdict
Fair-value range $231.10 – $408.36 (cautious → optimistic — tap the ? for the math)
Wall Street consensus: $560.95 (81.9% higher than our fair-value estimate)
Buy below $246.72 for a 20% safety cushion
Balance sheet
Net debt $47.20B. Interest coverage shows how many times profit covers the interest bill.
What stands out
Quick scan of the biggest positives and negatives from the detailed checklist below.
What this company does
Microsoft makes money selling the software many people and businesses use daily, like Windows and Office 365, along with the Xbox gaming platform. Its biggest and fastest-growing business, however, is renting out its massive computing power and services to other companies through its Azure cloud platform. This makes Microsoft a foundational technology provider for both everyday consumers and the corporate world.
Founded by Bill Gates and Paul Allen in 1975, Microsoft's big break came when it created the operating system for IBM's first personal computer. This led to the creation of Windows, which became the most popular operating system for PCs globally, making Microsoft a dominant force in the tech industry. Over the years, it expanded by creating popular software like Microsoft Office, which includes Word and Excel. More recently, under CEO Satya Nadella, the company has shifted its focus to cloud computing and artificial intelligence, becoming a major player in those areas as well.
Many people know Microsoft for its Windows software that runs most personal computers and for the Microsoft 365 (formerly Office) suite of tools like Word, Excel, and PowerPoint used by students and professionals. The company also makes its own line of laptops and tablets called Surface, and the popular Xbox gaming console. Beyond products for individuals, Microsoft provides a vast array of services for businesses, including cloud computing (storing and managing data and applications on the internet) and business software.
This is Microsoft's oldest and most well-known business, centered around its Microsoft 365 suite of products. Businesses and individual consumers pay subscription fees to use software like Word, Excel, PowerPoint, Outlook for email, and Teams for communication. This segment also includes LinkedIn, the professional social network, and Dynamics 365, a set of business management applications. This part of the company generates a very large portion of Microsoft's revenue through these recurring subscriptions.
This is now Microsoft's largest and fastest-growing business segment. It's built around Azure, a cloud computing platform that allows businesses to build, deploy, and manage applications and services through a global network of Microsoft-managed data centers. Instead of buying and managing their own physical servers, companies pay Microsoft to use its powerful computing infrastructure. This segment also includes other services for businesses like data analysis tools and artificial intelligence capabilities.
This segment contains the products that are most familiar to everyday consumers. It includes the licensing of the Windows operating system to computer makers, sales of Microsoft's own Surface devices, and the entire Xbox gaming division. The gaming business makes money from selling Xbox consoles, games, and subscriptions like Game Pass. This segment also includes revenue from search and news advertising through its Bing search engine.
Microsoft is heavily focused on leading the shift to artificial intelligence (AI), integrating AI capabilities across all its products and services, a strategy often referred to as 'Copilot'. The company is making significant investments in building out its global data centers to power these AI services. Another key priority is expanding its gaming footprint, especially through its Xbox Game Pass subscription service, to reach more players on different devices. Finally, security is a top priority, with a major initiative to ensure the highest level of cybersecurity protection across all its products.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
Wall Street consensus is the average analyst price target: $560.95 (81.9% higher than our fair-value estimate).
Buy below $246.72 for a 20% safety cushion. That means buying at least 20% below our fair value, as a buffer in case our estimate turns out too rosy.
Our most-likely fair value is $308.40 a share — about 26.0% below today's price of $416.67, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Net debt $47.2B. Interest coverage 53.9x.
Microsoft Corporation's profit covers its interest bill about 53.9 times over. which is stronger than most peers shown here.
Total debt $125.43B Interest coverage 53.89x This is the baseline the peer rows are being compared against.
Total debt $95.88B Interest coverage 175.32x +225% vs MSFT Carries about 3.3x more debt cushion than MSFT.
Total debt $235.54B Interest coverage 35.17x -35% vs MSFT Carries about 1.5x less debt cushion than MSFT.
Total debt $162.16B Interest coverage 5.05x -91% vs MSFT Carries about 10.7x less debt cushion than MSFT.
Total debt $6.67B Interest coverage 33.10x -39% vs MSFT Carries about 1.6x less debt cushion than MSFT.
What you should know
The numbers
Tap any ? icon to learn what it means.
Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know