Microsoft Corporation (MSFT) is Attracting Investor Attention: Here is What You Should Know (2024)

Microsoft (MSFT - Free Report) has recently been on's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Shares of this software maker have returned +9.2% over the past month versus the Zacks S&P 500 composite's +3.5% change. The Zacks Computer - Software industry, to which Microsoft belongs, has gained 5.4% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings Estimates

Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

Microsoft is expected to post earnings of $2.90 per share for the current quarter, representing a year-over-year change of +7.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of $11.77 points to a change of +20% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $13.18 indicates a change of +12% from what Microsoft is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Microsoft.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Microsoft Corporation (MSFT) is Attracting Investor Attention: Here is What You Should Know (1)

Projected Revenue Growth

Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Microsoft, the consensus sales estimate of $64.16 billion for the current quarter points to a year-over-year change of +14.2%. The $244.41 billion and $278.17 billion estimates for the current and next fiscal years indicate changes of +15.3% and +13.8%, respectively.

Last Reported Results and Surprise History

Microsoft reported revenues of $61.86 billion in the last reported quarter, representing a year-over-year change of +17%. EPS of $2.94 for the same period compares with $2.45 a year ago.

Compared to the Zacks Consensus Estimate of $60.63 billion, the reported revenues represent a surprise of +2.02%. The EPS surprise was +4.63%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.


No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Microsoft is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom Line

The facts discussed here and much other information on might help determine whether or not it's worthwhile paying attention to the market buzz about Microsoft. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Microsoft Corporation (MSFT) is Attracting Investor Attention: Here is What You Should Know (2024)


What is the MSFT prediction? ›

MSFT Stock Forecast FAQ

Based on analyst ratings, Microsoft's 12-month average price target is $500.55. What is MSFT's upside potential, based on the analysts' average price target? Microsoft has 8.63% upside potential, based on the analysts' average price target.

Who is the major investor in Microsoft? ›

The company's market cap was $3.14 trillion as of May 2024. The Vanguard Group was Microsoft's biggest shareholder as of May 2024, holding 664.91 million shares that made up 8.95% of the total shares outstanding. Satya Nadella owned 801,331 shares as of May 2024, making him the top individual insider shareholder.

Who are the list of Microsoft investors? ›

  • Owner Name. Date. Shares Held. ...
  • Vanguard Group Inc. 3/31/2024. 667,987,038. ...
  • Blackrock Inc. 3/31/2024. 546,019,859. ...
  • State Street Corp. 3/31/2024. 300,354,231. ...
  • Fmr Llc. 3/31/2024. 220,859,696. ...
  • Geode Capital Management, Llc. 3/31/2024. 157,588,678. ...
  • Price T Rowe Associates Inc /Md/ 3/31/2024. 142,200,683. ...
  • Jpmorgan Chase & Co. 3/31/2024.

What is MSFT used for? ›

We develop and market software, services, and hardware that deliver new opportunities, greater convenience, and enhanced value to people's lives. We do business worldwide and have offices in more than 100 countries.

Is MSFT a good buy right now? ›

Mostly positive signals in the chart today. The Microsoft stock holds buy signals from both short and long-term Moving Averages giving a positive forecast for the stock. Also, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average.

Where will MSFT stock be in 5 years? ›

Microsoft stock price stood at $460.77

According to the latest long-term forecast, Microsoft price will hit $500 by the end of 2024 and then $700 by the end of 2026. Microsoft will rise to $900 within the year of 2028, $1100 in 2030, $1200 in 2032, $1300 in 2034 and $1400 in 2035.

Who owns the most MSFT stock? ›

Who Owns the Most Microsoft Stock? Top Microsoft Shareholders
  • The Vanguard Group – 649,207,002 Shares – 8.7% ...
  • Blackrock – 538,937,099 Shares – 7.1% ...
  • State Street Corporation (STT) – 288,457,142 Shares – 5.1% ...
  • Fidelity (FMR LLC) – 218,838,469 Shares – 2.9% ...
  • T Rowe Price Associates – 151,921,031 Shares – 2% ...
  • Steven A.
Feb 14, 2024

Who controls Microsoft now? ›

Microsoft was founded by Bill Gates and Paul Allen in 1975. Currently, the CEO of Microsoft is Satya Nadella. Microsoft is a publicly traded company, which means that it is owned by its shareholders.

Does Microsoft own Google? ›

Microsoft is not owned by Google. The two are intense competitors and have been for a long time. They compete across a range of businesses like cloud computing, enterprise software, digital advertising, hardware, and artificial intelligence.

Is it safe to invest in MSFT? ›

Fair Value Estimate for Microsoft Stock

With its 3-star rating, we believe Microsoft's stock is fairly valued compared with our long-term fair value estimate of $435 per share, which implies a fiscal 2024 enterprise value/sales multiple of 12 times and an adjusted price/earnings multiple of 37 times.

Does Bill Gates still own Microsoft? ›

What Happened: Gates stepped down as the CEO of Microsoft in 2000 and later left the board of directors in 2020. The co-founder of the software giant remains a large shareholder in the company through his own holdings and the stock holdings of the Bill and Melinda Gates Foundation Trust.

Who is Microsoft's biggest competitor? ›

Microsoft Corporation's (MSFT) primary competitors include some of the most prominent technology companies in the industry. The list includes well-known brands such as Apple (AAPL), Google (GOOG), SAP SE (SAP), IBM (IBM) and Oracle (ORCL), among others.

What is the MSFT prediction for 2025? ›

Microsoft Stock Prediction 2025

The Microsoft stock prediction for 2025 is currently $ 580.13, assuming that Microsoft shares will continue growing at the average yearly rate as they did in the last 10 years. This would represent a 25.90% increase in the MSFT stock price.

What is the MSFT forecast for 2024? ›

Microsoft stock forecast 2024

Analysts are generally optimistic about Microsoft's business and stock price in 2024. The analysts covering MSFT project full-year adjusted earnings per share of $11.80 in fiscal 2024.

What is Microsoft's expected rate of return? ›

Microsoft (Microsoft) Forward Rate of Return (Yacktman) % : 19.86% (As of Mar. 2024)

What is the fair value of Microsoft? ›

As of 2024-07-04, the Fair Value of Microsoft Corp (MSFT) is 289.89 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 460.77 USD, the upside of Microsoft Corp is -37.1%.


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