Microsoft Slumps to Attractive Price Point Amid Big Tech De-Risking
Microsoft's stock has fallen to an attractive price point following a market de-risking from big tech, according to 24/7 Wall St. The company's Azure division recently crossed $100 billion in annual revenue, but shares are trading well off their highs.
The recent selloff raises the question of whether it reflects a real problem or an overreaction by the market. At $491.65, Microsoft looks undervalued compared to its fundamentals. The company's underlying trajectory remains strong, with commercial remaining performance obligations up 84% year-over-year and management guiding fiscal Q1 2027 Azure growth to approximately 45% in constant currency.
The demand for Microsoft's products is exceeding supply, according to CEO Satya Nadella. The AI business has hit a $37 billion annual run rate growing 123% year-over-year, and GitHub Copilot revenue accelerated over 60% quarter-over-quarter.