Is it too late to buy Microsoft stock?
If you don't already have significant portfolio exposure to the gen-AI market, it's not too late to look at Microsoft stock. Even if you have gen-AI exposure in your portfolio, you can still consider investing in Microsoft. The company has created and defended its economic moat through relentless product innovation.
While that might seem pricey to some, I'd suggest it's remarkably reasonable, given the company's growth prospects. It deserves a slight premium. Given the multiple ways Microsoft can profit from the AI revolution and other catalysts that could fuel its growth, I'd argue it's not too late to buy Microsoft.
Microsoft currently has an average broker rating (ABR) of 1.14 on a scale of 1 to 5 (Strong Buy to Strong Sell). To that point, 33 out of the 37 brokers covering Microsoft's stock and providing data to Zacks have strong buy ratings with three having buy ratings and only one at a hold.
Have a look at the above chart and you'll see that if you put a grand into MSFT stock two decades ago, today it would be worth more than $24,000. The same amount invested in the S&P 500 20 years ago would theoretically be worth almost $6,500 today.
According to Various Analysts, Microsoft Stock the Price Per Share at $420 by the End of 2024, $480 in 2025, $530 in 2026, $530 — $580 in 2027, $580 — $630 in 2028, $680 in 2029, $730 in 2030, $3,000 or Even $5,000 in 2035, $10,000 in 2040, $50,000 or Even $100,000 in 2050, $50k to $100k+ in 2060, According to ...
Microsoft stock price stood at $420.45
According to the latest long-term forecast, Microsoft price will hit $450 by the end of 2024 and then $500 by the middle of 2025. Microsoft will rise to $600 within the year of 2026, $700 in 2027, $800 in 2028, $900 in 2030, $1000 in 2033 and $1100 in 2035.
The Zacks Consensus Estimate has increased $0.49 to $11.63. MSFT boasts an average earnings surprise of 8.8%. Earnings for Microsoft are forecasted to see growth of 18.6% for the current fiscal year as well. Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable.
Microsoft's analyst rating consensus is a Strong Buy. This is based on the ratings of 34 Wall Streets Analysts.
Microsoft stock has received a consensus rating of buy. The average rating score is Aaa and is based on 96 buy ratings, 1 hold ratings, and 2 sell ratings.
According to our current MSFT stock forecast, the value of Microsoft shares will rise by 1.60% and reach $ 427.19 per share by April 9, 2024. Per our technical indicators, the current sentiment is Neutral while the Fear & Greed Index is showing 39 (Fear).
What if you invested $1,000 in Microsoft 10 years ago?
Had you invested $1,000 in Microsoft 10 years ago, you would have turned a hefty profit by today. According to computations by CNBC, that modest amount would be worth $11,400 as of Nov. 9. But you would be even richer if you had the foresight to invest the same amount back when the company had its IPO in the 80s.
A $10,000 investment in Microsoft 30 years ago, at the start of January 1994, would be worth nearly $2.4 million today with dividends reinvested.
Microsoft's return is even more impressive than Apple's, as it turned $1,000 invested in its 1986 IPO to $4.1 million now. However, Microsoft's stock ride was rather bumpy, as its stock turned $1,000 into nearly $600,0000 by the turn of the century.
Now, in 2023's second half, that resistance has greatly diminished. Besides, Microsoft will undoubtedly continue to make waves with its leading-edge, AI-friendly product lines. Therefore, MSFT stock is likely on a path to $400 or more, and it earns a confident “B” rating.
Amazon has a conensus rating of Strong Buy which is based on 41 buy ratings, 0 hold ratings and 0 sell ratings. The average price target for Amazon is $209.74. This is based on 41 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
Microsoft stock's sound track record, combined with its leadership in generative AI and cloud computing, makes it a compelling investment opportunity in 2024. The company offers a unique blend of growth and stability, fueled by its extremely large moat and constant innovation.
As of 2024-02-19, Microsoft Corp's intrinsic value as calculated by the Discounted Earnings model is $292.58. It's currently trading at a price of $404.055. Therefore, the margin of safety based on the DCF model is -38.1%. The company is modestly overvalued.
Tracking long-term share price performance adds depth to investment analysis. In this case, Microsoft's long-term trend remains unmatched.
If Amazon maintains its current valuations, matches analysts' expectations, and grows its EPS at a CAGR of 20% from 2025 to 2030, its market cap would reach $5.5 trillion by the final year. If Apple does the same thing and grows its EPS at a CAGR of 10% from fiscal 2026 to fiscal 2030, it would be worth $5.2 trillion.
According to our calculations, a $1000 investment made in February 2014 would be worth $5,971.20, or a gain of 497.12%, as of February 5, 2024, and this return excludes dividends but includes price increases. Compare this to the S&P 500's rally of 178.17% and gold's return of 55.50% over the same time frame.
What if I invested $1,000 in Microsoft in 1986?
Had you invested $1,000 in Microsoft at its IPO, you would have acquired 47 shares at $21 per share. Adjusting for the stock splits, you'd actually have 13,536 shares today with a cost basis of $0.0729 per share.
Based on recent momentum, Microsoft is the best play right now. The stock is up 8.57% YTD as of March 5, and 58.43% over the past year. Analysts have an average 12-month price target of $468.70 on the stock, with a consensus “strong buy” rating.
Key Points. Microsoft's growth is accelerating thanks to the company's initiative of integrating AI across multiple products. An acceleration in Microsoft's growth, multibillion-dollar revenue opportunities, and the company's valuation indicate that its stock market rally is sustainable.
Microsoft stock has an IBD Composite Rating of 91 out of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary rankings into one easy-to-use number. The best growth stocks have a Composite Rating of 90 or better. MSFT stock has an IBD Relative Strength Rating of 87 out of 99.
Looking at cash flow, Microsoft is expected to report cash flow growth of 3.9% this year; MSFT has generated cash flow growth of 16.6% over the past three to five years. With solid fundamentals, a good Zacks Rank, and top-tier Growth and VGM Style Scores, MSFT should be on investors' short lists.
