Microsoft trades near $395, down roughly 30% from its autumn high of $555, even as earnings per share grow about 17%. A Seeking Alpha analyst argues the selloff misprices the company’s AI integration and calls the stock a discount worth accumulating.
Microsoft has dropped about 30% from its all-time high of $555 reached last autumn, trading near $395 against a 52-week low of $350. For a blue-chip name, a one-third decline is unusual, and one Seeking Alpha analyst reads it as a rare entry point rather than a warning.
Earnings hold up as the price falls
The drop has come even as the business keeps growing. The analyst points to earnings per share expanding about 17% despite sector-wide weakness in software-as-a-service names.
Much of the bearish case rests on fears that AI could erode Microsoft’s software franchise. The analyst argues the opposite: Office 365 remains entrenched while tools such as Copilot and Claude enhance the stack rather than disrupt it. In this reading, the market appears to be mispricing that integration.
Azure growth runs into capacity limits
Cloud remains the growth engine, but not without friction. Azure is expanding 40% year over year, yet that pace is currently constrained by capacity, according to the analyst.
Management expects those limits to resolve by the end of fiscal 2026, which could accelerate Azure’s growth into fiscal 2027.
A discount on the numbers
On a current price-to-earnings ratio of 23.45, Microsoft sits below its historical average. The stock valuation case, as the analyst lays it out, pairs higher-than-average earnings growth with a below-average multiple — a combination he says has him accumulating shares aggressively.
Source: Seeking Alpha (snippet-based)
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