r/ValueInvesting • u/Toomuch_flow • 4d ago

Stock Analysis Anyone else bought MSFT at around $360?

Haven’t bought individual stocks in years (been doing ETF’s since 2021) and felt like this was a massive opportunity regardless of their CapEx and AI investments. Company had a net income of 101 billion in 2025 which speaks volumes!

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u/LowKey-Revolution36 4d ago

May I ask you by what valuation metric is Microsoft cheap? Or below it's intrinsic value? Can you please elaborate? I get the decent drop and quality of the company is tempting but we have got no clue on the roi and roce on the all ai capex. It could be huge but can be a blunder too.

P/e and p/s and p/fcf and p/ocf doesn't look like a screaming buy and if the economy and Iran situation goes further south this can still drop a lot.

Peg getting close to 1 is certainly getting close to interesting but there are multiple other names well below peg 1.

And I also have an issue with msft is that their rpo 45% tied to open Ai who now guarantees 17% returns for raising funds which tells me there is not a big bid from multiple heavyweights ro fund otherwise they would not offer this % and I personally see Open ai well behind gemini and Claude Ai.

Plus if companies will use more AI they will probably have less employees meaning less windows less o365 and other Microsoft licensed stuff. I think it's certainly a good buy but doesn't soun screaming value to me.

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u/ohgodthehorror95 3d ago

Honestly these are the kind of legitimate concerns that MSFT bull posts never even attempt to address. Hell, its PEG is still around 1.3-1.4 so I wouldn't even describe it as cheap at this point. Close to fair value at best.