![\"Person](\"https:\/\/barchart-news-media-prod.aws.barchart.com\/FC\/1b7ce544a4a345836370b15c430af7e8\/%3Furl%3Dhttps%253a%252f%252fg.foolcdn.com%252feditorial%252fimages%252f883769%252fperson-thinking-while-using-a-tablet.jpg%26amp%3Bw%3D700\"\/)
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Image source: Getty Images.<\/p>\n
Microsoft’s stock is trading below its five-year average earnings multiple<\/p>\n
While Microsoft may not be the dirt cheap stock it was earlier in the year, its valuation still isn’t all that high given how much investors have been paying for it in the past. Over the past five years, it has traded at an average price-to-earnings multiple<\/a> of 32, and at around 27 right now, it’s well below that today.<\/p>\n MSFT PE Ratio<\/a> data by YCharts<\/a><\/p>\n The big question, however, is whether it was overvalued to begin with. The company typically generates double-digit growth, but whether that’s enough to justify paying more than 30 times earnings is debatable. Many stocks have been trading at elevated levels in recent years, and Microsoft has been no exception to that.<\/p>\n What it may come down to is expectations for the company’s future growth and how much of a boost investors expect the business to get from artificial intelligence (AI).<\/p>\n Is Microsoft stock a good buy right now?<\/p>\n In its most recent quarterly earnings report, Microsoft gave investors many reasons to be optimistic about its future growth prospects. Azure hit $100 billion in revenue for the first time in a full fiscal year, with its growth rate rising to 43% in the fourth quarter. Microsoft 365 Copilot also appears to be winning over customers, hitting 30 million paid seats. CEO Satya Nadella says this is indicative of “the confidence customers are placing in us to power their AI transformation.”<\/p>\n While the tech stock may be a bit more expensive than it was earlier in the year, I think it still offers excellent value and may be an underrated AI stock<\/a> to own. For long-term investors, Microsoft can be a good buy, even at its current price.<\/p>\n Should you buy stock in Microsoft right now?<\/p>\n Before you buy stock in Microsoft, consider this:<\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks<\/a> for investors to buy now\u2026 and Microsoft wasn\u2019t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you\u2019d have $421,511!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you\u2019d have $1,381,960!*<\/p>\n Now, it\u2019s worth noting Stock Advisor\u2019s total average return is 981% \u2014 a market-crushing outperformance compared to 216% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.<\/p>\n See the 10 stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of August 17, 2026. <\/p>\n David Jagielski, CPA<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy<\/a>.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"Key Points Microsoft’s stock is trading well below the earnings multiple it has averaged over the past five…\n","protected":false},"author":2,"featured_media":142629,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[420,7829,309,148,980,1151,1303,1020,1304,1305,320,7828,1309,936,1308,1306,1307,1310],"class_list":["post-142628","post","type-post","status-publish","format-standard","has-post-thumbnail","category-microsoft","tag-azure","tag-azure-ai","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-investing","tag-investor","tag-market-news","tag-microsoft","tag-microsoft-ai","tag-motley-fool","tag-press-releases","tag-sedar","tag-stock-research","tag-stock-valuation","tag-the-globe-and-mail"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/142628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=142628"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/142628\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/142629"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=142628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=142628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=142628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"MSFT](\"https:\/\/barchart-news-media-prod.aws.barchart.com\/FC\/1b7ce544a4a345836370b15c430af7e8\/%3Furl%3Dhttps%253a%252f%252fmedia.ycharts.com%252fcharts%252f7ab4871c034bbb5bc2c9b8911ebeb597.png%26amp%3Bw%3D700\"\/)
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