By Simply Wall St
Publication Date: 2026-09-23 17:37:00
Microsoft has ridden a powerful multi year run in tech and AI, yet at a last close of US$498 the live question for you is whether that price still lines up with the cash the business can generate over time.
- Over the past 5 years the stock has returned 83.0%, which puts a lot of future cash flow expectations into focus for anyone coming to Microsoft at today’s valuation.
- Heavy investment tied to OpenAI partnerships, data centers, Copilot pricing and wider AI infrastructure can support future revenue but also pulls significant cash forward in the form of spending that needs to be earned back through profits.
- If you’d rather focus on earnings, this one’s for you. See why Microsoft’s 27.6x P/E tells a different valuation story.
The issue now is whether Microsoft’s current share price is adequately supported by the cash flows implied in its Discounted Cash Flow (DCF) based intrinsic value estimate.
Alongside Microsoft, a focused stock screen can be a useful second lens on AI…
