Everyone knows Microsoft (NASDAQ: MSFT) and its best-known products, including the Windows operating system and Microsoft 365 suite of productivity apps, but its growing cloud computing platform, Azure, is the future of the company.
Microsoft stock has been a millionaire maker for decades, with a stock split-adjusted IPO price of $0.14, which means at today's stock price of $415.81, the stock is up 427253.55%. That would have turned a $1000 investment at Microsoft's IPO into $4.27 million today.
As one of the most valuable companies in the world, the only thing investors focus on is what the stock will do over the coming years. Wall Street analysts only go as far as 1 year out when giving a stock prediction. But long-term investors want to know where Microsoft might be several years down the road.
24/7 Wall Street aims to give you our assumptions on the stock and provide our insights around the numbers coming from Microsoft and which markets the company is operating in that are most exciting to us.
Key Points in this Article:
Microsoft is investing €4.3 billion into operations in Italy. The data center will be a key data hub for North Africa and the Mediterranean and will expand its AI infrastructure and cloud systems.
10/4/2024
Microsoft and the U.S. government stopped a group of Russian hackers called Star Blizzard, seizing over 100 website domain names used to steal information.
10/2/2024
Microsoft is building a data center in New Albany, Ohio. Construction on the $420 million center is scheduled to start in July and finish in 2027. The new data center will cover 245,000 square feet and create 30 jobs.
10/1/2024
Microsoft is making significant changes and upgrades to its AI assistant, Copilot. The new version will now be able to have more natural conversations with users, with the ability to actively listen and handle interruptions and pauses. It's also designed to be more emotionally supportive and encouraging.
9/30/2024
KT Corporation is partnering with Microsoft in a deal valued at $450 million. One of the largest telecommunications companies in South Korea, KT Corporation will be working to strengthen Microsoft's cloud services and global network infrastructure.
9/27/2024
Microsoft has revised its controversial Recall tool following privacy concerns this summer. Due to backlash, the company postponed its scheduled May 2024 launch and has now made significant changes. Users can choose to enable the updated tool, and the Information Commissioner's Office (ICO) in the U.K. will continue to monitor it. Recall is now scheduled to launch in November 2024.
9/26/2024
Microsoft announced a major investment in Brazil. The company will pump 14.7 billion reais ($2.70 billion) into the country over the next three years to expand its cloud infrastructure and AI capabilities.
9/25/2024
Google has accused Microsoft of using unfair business practices to limit competition in the cloud computing market. In a lawsuit filed this week, Google claimed that Microsoft's licensing agreements make it difficult for customers to switch to other cloud providers like Google Cloud Platform. This follows a recent settlement between Microsoft and other cloud companies that addressed similar concerns.
9/24/2024
Microsoft is investing $1.3 billion to support Cloud and AI infrastructure in Mexico. This investment will help improve connectivity and encourage AI adoption by small and medium-sized businesses. It will also support the Artificial Intelligence National Skills program, which aims to train 5 million people in AI skills.
9/23/2024
Microsoft released a progress report today for the Secure Future Initiative, which will help protect U.S. government and public sector cloud accounts. Identity verification will be strengthened to prevent a repeat of last summer when Chinese hackers exploited a vulnerability to access government email accounts. Microsoft's new tool will now automatically generate, store, and rotate token signing keys.
Microsoft's 10-Year Market Smashing Results
Here's a table summarizing performance in share price, revenues, and profits (net income) from 2014 to 2018.
Revenue and net income in $billions
In the last decade, Microsoft's revenue grew 222% while its net income went from $22.07 billion to over $86 billion (in the trailing 12 months). A big driver of profits over the past decade was Microsoft's Intelligence cloud business, which grew 18% annually and drove operating profits of $37.88 billion in 2023 from $8.44 billion in 2014.
As Microsoft looks to the second of the decade, a few key areas will determine its performance.
The current consensus 1-year price target for Microsoft stock is $480.90, which is a 15.65% upside from today's stock price of $415.81. Of all the analysts covering Microsoft, the stock is a consensus buy, with a 1.33 "Buy" rating.
24/7 Wall Street's 12-month forecast projects Microsoft's stock price to be $495. We see Azure continuing its 20+% growth and earnings per share coming in right at $11.80.
We expect to see revenue growth of just over 8% and EPS of $15.67 for 2025. We expect the stock to still trade at a similar multiple next year, putting our estimate for the stock price for Microsoft at $548.00 in 2025, which is 31.79% higher than the stock is trading today.
Going into 2026, we estimate the price to be $633.00, with small revenue gains but margins expanding and an EPS of $18.10. We expect to see Microsoft's P/E ratio steep down slowly each year through 2030. The stock price estimate would represent a 52.23% gain over today's share price of $415.81.
Heading into 2027, we expect the stock price increase not to be as pronounced and earnings estimates of $20.40 per share, the stock price target for the year is $652.00. That is a 3% year-over-year gain from the previous year, but still up 56.80% from today's stock price.
When predicting more than 3 years out, we expect Microsoft's P/E ratio to drop to 30x in 2028 but grow its top line by 14%. In 2028, we have Microsoft's revenue coming in around $420 billion and an EPS of $22.62 suggesting a stock price estimate at $678.00 or a gain of 63.05% over the current stock price.
24/7 Wall Street expects Microsoft to continue its 10% revenue growth again and to generate $12.30 per share of earnings. With a price-to-earnings multiple of 35, the stock price in 2029 is estimated at $687.00, or a gain of 65.22% over today's price.
Microsoft Stocks Price Target for 2030
We estimate Microsoft's stock price to be $717.00 per share with a sub 10% year-over-year revenue growth. Our estimated stock price will be 72.43% higher than the current stock price of $415.81.