GROWTH
Top line stable.
+14.9% YoY versus +15.7% prior. 3y CAGR +12.4%.
+14.9%
Microsoft Corporation MSFT
Technology · Market Cap: $2.90T
Live price unavailable
Fundamentals as of 2025-12-31
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Technology · Market Cap: $2.90T
Live price unavailable
Fundamentals as of 2025-12-31
All analysis on this page is for educational purposes only and does not constitute financial advice. Fair values are model-based estimates. Always do your own research.
The Question
2 of 2 legendary models say AVOID MSFT.
What would legendary investors pay for MSFT?
These figures are not quotes or opinions from Buffett, Graham, Lynch or the other investors. They are our own estimates, computed by applying the intrinsic-value formulas each investor is known for to this company’s financials.
For educational purposes only. Not a recommendation to buy or sell securities.
Yes — Microsoft Corporation's 30.5% ROE ranks above the S&P 500 median, and D/E 0.70 stays within healthy bounds.
Financial story
Yes — Microsoft Corporation's 30.5% ROE shows strong capital efficiency, and its 0.70 debt-to-equity stays within healthy bounds.
Bottom line: MSFT is flagged as overvalued by 1 of 2 legendary models, with 0 BUY and 1 HOLD, but earns a B sector grade (62/100) in Technology. Whether the premium is justified depends on which lens you trust. Drill into the valuation breakdown and sector ranking for the full picture.
MSFT's P/E ratio is 23.3x. 5-year P/E history is in the financials tab.
0 of 2 legendary models say BUY. Full breakdown by investor and signal is in the valuation tab.
MSFT's earnings calendar and history are tracked in the financials tab. Specific dates depend on company-published guidance.
MSFT is in the Technology sector. Sector ranking and peer comparison are in the sector tab.
0 of 2 legendary investor models rate MSFT a BUY. Fair value estimates and full investor breakdown are in the valuation tab.
Average fair value across qualifying models: $327. See the per-investor fair-value table in the valuation tab.
How does MSFT compare?
Strength. Azure +40%, 46.3% operating margins and a $627B commercial backlog — the business is compounding like few others.
Risk. Capex guidance of ~$190B (+61%) is squeezing free cash flow (−22%), and the OpenAI stake adds accounting noise.
See exactly where MSFT ranks
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Sign in to see the rankingMSFT sits at #13 in Technology with a B grade (62/100).
The market is repricing backlog quality, not backlog size. Oracle's headline numbers were strong — total cloud revenue around $9.9 billion (up roughly 47%), OCI up about 93%, and a remaining-performance-obligation balance near $638 billion — yet the stock fell roughly 10% the day after the print. That gap between fundamentals and price action is the whole story.
The smoking-gun datapoint: of that ~$638 billion backlog, roughly $300 billion (about 47%) is reportedly tied to a single counterparty, OpenAI, largely through the Stargate buildout. A backlog that concentrated is worth a lower multiple than a diversified one, because the variance of outcomes is wider — one renegotiation, funding gap, or timeline slip moves a disproportionate share of future revenue.
Forward read (1-4 quarters): the bull/bear debate now centers on cash conversion. Oracle spent roughly $55.7 billion in fiscal 2026 and guided to about $70 billion in fiscal 2027. That capex is front-loaded ahead of the revenue it supports, compressing near-term free cash flow and lifting leverage — so even with revenue growth accelerating, the equity can de-rate as investors demand a higher risk premium on the OpenAI exposure.
Counter-narrative: bulls argue the concentration is a feature, not a bug — a multi-year, contractually committed anchor tenant that underwrites the capex and would be hard for any rival cloud to replicate. If OpenAI's compute demand holds, the backlog converts and today's multiple looks cheap in hindsight. The risk is closer to binary, which is exactly why the multiple, not the growth rate, is doing the moving.
