Microsoft Valuation Returns to Reasonable Range Amid Flat Stock Performance
Microsoft's stock has been relatively flat in 2026, despite its strong rally earlier this year. The company's valuation is now back to a reasonable range, and some investors who bought shares during its sell-off in April and June are up over 30% on their investments.
The tech giant's hands-on approach to various aspects of the tech ecosystem has contributed to its growth. Its cloud computing business, Azure, surpassed $100 billion in revenue for the fiscal year, with a 43% revenue growth rate. Additionally, AI assistant Copilot reached 30 million paid seats during Microsoft's latest quarter.
Despite these solid results, the stock is still valued at 25 times forward earnings, which some consider reasonable given its position as an AI hyperscaler. However, Microsoft was not the cheapest stock heading into the year and its valuation has returned to a normal range after its rally.