Microsoft | MSFT | August 8th 2025

8 Aug 2025 · 1 min

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Microsoft has solid products like Office and Azure, but the stock is overvalued. A DCF model shows the current price would need over a century of continuous profit growth to justify itself. Most investors have already piled in, making this a good company at a bad stock price.

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Every stock has its limit. Like, you can't have an infinite value. The law of competition says that there's a limit to how much money a company can make. There's not an infinite amount of value. And right now, Microsoft is priced as if it's going to create a whole lot of value. When we run it through our discounted cash flow model, it needs more than 100 years of profit growth to justify the stock price. So, when we look at our rating and we see the orange here and the red here, That's bad. The green here means good company. A good company is not always a good stock. This is a good company, bad stock, meaning it's good, but it's a crowded trade. Everybody knows Microsoft is great. Everybody knows about Microsoft Office. Everybody knows about Microsoft Azure. The way to make money is to get there before everyone else has. And at Microsoft, everyone has arrived.