Microsoft: The Valuation Is Too Rich For This Behemoth


  • Microsoft is down over 20% from its peak in the fall of 2021, but shares still trade at a premium valuation of 26.7x earnings.
  • MSFT is in the news for its recent investment in OpenAI (the company behind Chat GPT) and ongoing regulatory drama with the acquisition of Activision.
  • The company continues to buy back stock despite the rich valuation.
  • Investors can count on continued dividend growth on top of the current 1.1% yield.
  • With a market cap near $2T, I have a hard time seeing how the stock will outperform moving forward simply due to the massive size of the company.

FILE PHOTO Federal Judge Throws Out Five Lawsuits Against Microsoft

Ron Wurzer/Getty Images News

It’s been a while since my last article on Microsoft (NASDAQ:MSFT), the tech giant with a market cap of $1.85T. That article was in May, and shares are down about 10% since then. While I prefer Microsoft’s stock to other

Microsoft Price/Earnings

Price/Earnings (

Disclosure: I/we have a beneficial long position in the shares of ATVI either through stock ownership, options, or other derivatives. 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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