MSFT

Microsoft Corporation
TechnologySoftware - InfrastructureNASDAQ
$450.24
+$33.47 (7.43%)today
Conviction
7/ 10
Fair Value$585.41
Upside+30.02%
Signal21.01
Market Cap$2.86T
52W Range$355.67–$555.45
Next EarningsApr 29

Conviction History

Conviction Changes

Mar 15, 2026, 5:07 PM87candidate-reeval
Mar 8, 2026, 5:04 PM68weekly-reeval
Mar 7, 2026, 4:06 AM76macro-brief
Mar 5, 2026, 4:06 AM87macro-brief
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Price History

FAIR VALUE ANALYSISMonte Carlo · 5,000 runs · 99% valid
Fair Value$336.11
Current Price$381.85
Upside / Down-12.0%
P(Undervalued)19.0%
P(20%+ Up)1.8%
P(15%+ Down)39.9%

Fair Value Distribution — percentile bands

19.0% of simulations place fair value above current price

WHAT IS PRICED IN

Revenue-Based Reverse DCF

15.0%/yr

±3.5% · revenue growth to justify current price

FCF-Based Reverse DCF

21.8%/yr

±3.2% · FCF growth to justify current price

THE GAP

Market pricing margin compression or rising capex

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Bull Case

Azure reaccelerating at +39% with RPO at $625B — the backlog alone is larger than most tech companies' revenue. Copilot monetization just starting across Office 365's 400M+ seat base. OpenAI partnership gives MSFT the most defensible AI distribution moat in enterprise software.

Bear Case

Down 17% in 3 months from war-deleveraging — macro headwinds are real and MSFT trades as a risk asset now. $80B+ annual capex on AI infrastructure needs to generate returns; if Copilot uptake disappoints, the capex looks like overinvestment. Antitrust risk from EU and DOJ on cloud bundling.

Thesis Breakers

Azure growth below 30%, Copilot churn above 20%, antitrust forced unbundling

Updated Mar 11

Research Feed

newsApr 1
Conviction: unchanged
MSFT Down ~26% YTD; FY2026 CapEx $110-120B; Earnings April 28

MSFT -26% YTD despite strong growth — market questioning whether AI CapEx ($110-120B FY26) will ROI. Stock trying to recover from weak 2026 start. Earnings April 28 will be critical test. Analyst avg ...

newsMar 30
Conviction: unchanged
MSFT: Down 22-24% YTD; HR Restructuring Pressure; Azure +39% But CapEx +66% to .5B/Quarter

MSFT confirmed -22% YTD with HR restructuring news adding pressure. Q2 FY2026: revenue .3B (+17%), Azure +39%, but CapEx surged 66% to .5B/quarter with B projected for full FY2026. Market questioning ...

newsMar 27
Conviction: unchanged
MSFT: Worst Mag-7 Stock in 2026, Down 20%+ — AI Disruption Fears vs Azure +39% Growth Reality

MSFT down 20% YTD, worst Mag-7 performer. Market pricing in risk that AI software makes MSFT enterprise suite obsolete. Azure +39% growth is real but sentiment overwhelmingly negative. April 29 earnin...

sec_10qMar 3
Conviction: unchanged
MSFT Q2 FY2026 10-Q: Azure +39%, RPO +110% to 625B - AI Infrastructure Bet Confirmed

Azure +39-40% confirms AI demand. Commercial RPO +110% to 625B signals enterprise AI cloud scale commitments. 47% operating margin with 17-18% revenue growth. CapEx surge (49.3B H1) compressed FCF but...

sec_10qFeb 28
Conviction: unchanged
MSFT Q2 FY2026 10-Q: Azure Reaccelerating, CapEx Surge, OpenAI Distortion — Strong Fundamentals at 5-Year Valuation Low

Azure reaccelerated to 39%, commercial RPO surged 110% to $625B, and operating margin expanded to 47%. GAAP EPS was massively inflated by a $10B OpenAI dilution gain. Adjusted EPS +24%. CapEx intensit...