Microsoft Stock Could Soar by Nearly 50% in Three Years
Microsoft shares have returned 37% over the past three months, outperforming the S&P 500 by a significant margin. Despite this impressive run, Microsoft's price-to-earnings (P/E) ratio stands at 28.3, which is lower than its average of 31.8 over the last twelve quarters.
According to Trefis analysis, if Microsoft continues to grow revenue at a rate of 15.1% per year, its stock price could reach $753 in three years, representing a 48% increase from today's price of $508.96. This would translate to an annual return of approximately 14%.
The growth is attributed solely to Microsoft selling more products, with the P/E ratio remaining flat and net margin slightly lower. The Intelligent Cloud segment, which includes Azure cloud computing services, has been a key driver of revenue growth, with revenue from this area increasing by 43% in fiscal Q4 2026.
Microsoft's customer demand continues to exceed available capacity, and the company is on track to double its overall capacity in two years. The introduction of Copilot, an AI assistant, has also contributed to Microsoft's growth, with paid seats exceeding 30 million by the end of fiscal Q4 2026.