Microsoft: Rule Of 40 Points To Buy

Summary:

  • Assessed by the rule of 40, Microsoft Corporation is a strong buy opportunity under current conditions.
  • It offers an excellent balance of growth and profitability with a combined score of 45.9%, surpassing the 40% threshold of the rule.
  • I also find discussion surrounding Microsoft’s valuation misleading.
  • Its valuation multiple should be benchmarked against other companies that also pass this rule, not just the sector in general.

Internet infrastructure concept. Abstract technology background.

amgun

MSFT stock and the rule of 40

I last wrote on Microsoft Corporation (NASDAQ:MSFT) stock about a month ago, in July 2024. The article was titled “Microsoft Q4: Buy The Correction.” As you can


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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