Microsoft has gotten torched over the last six months - since August 2025, its stock price has dropped 23.1% to $411.99 per share. This might have investors contemplating their next move.
Following the pullback, is now a good time to buy MSFT? Find out in our full research report, it’s free.
Why Are We Positive On MSFT?
Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.
1. Skyrocketing Revenue Shows Strong Momentum
Microsoft proves that huge, scaled companies can still grow quickly. The company’s revenue base of $153.3 billion five years ago has nearly doubled to $305.5 billion in the last year, translating into an exceptional 14.8% annualized growth rate.
Over the same period, Microsoft’s big tech peers Amazon, Alphabet, and Apple put up annualized growth rates of 14.1%, 18.1%, and 8.2%, respectively. 
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it shows whether a company’s growth is profitable. It also explains how taxes and interest expenses affect the bottom line.
Microsoft’s EPS grew at an astounding 18.9% compounded annual growth rate over the last five years, higher than its 14.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Microsoft has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the software sector, averaging 28.3% over the last five years.
Final Judgment
These are just a few reasons why we think Microsoft is a high-quality business. With the recent decline, the stock trades at 24.1× forward price-to-earnings (or $411.99 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than Microsoft
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