By Will Healy
Publication Date: 2026-03-21 20:47:00
To some investors, it may come as a shock that Microsoft (MSFT 1.92%) is now the cheapest stock in the “Magnificent Seven” as measured by price-to-earnings ratio. Its earnings multiple of 25 is the lowest valuation since the worst of the bear market in 2022. Even Alphabet and Meta Platforms, which had previously had the lowest valuation in the Magnificent Seven, have gained traction relative to Microsoft.
So the stock is cheap, in relative terms. But just because a mega-cap tech stock becomes inexpensive, that does not guarantee a rebound. Knowing that, should investors treat this as a buying opportunity in Microsoft or stay on the sidelines?
Image source: Getty Images.
What happened to Microsoft?
Microsoft encountered a perfect storm of challenges. For one, it has a close partnership with OpenAI. Tech investors may recall how the doubts surrounding Oracle‘s $300 billion partnership with OpenAI put some hurt on Oracle stock. Likewise, around 45% of Microsoft’s $625 billion…
