Is Microsoft (MSFT) a smart stock to invest in? The bullish viewpoint from Hated Moats Investors presents a strong case. As of June 8th, Microsoft shares were trading at $411.74. Based on Yahoo Finance, MSFT’s trailing P/E stood at 24.82x, with a forward P/E of 21.46x.
Microsoft is well-known for developing and supporting various software, services, devices, and solutions globally. It’s considered a leading player in enterprise software and cloud services. The current investment narrative centers on its growth in artificial intelligence, the Azure cloud platform, and its strategic partnership with OpenAI. Demand for offerings like Microsoft 365 and AI workloads remains robust. The company anticipates a revenue increase of 15% by fiscal 2027, following strong growth in recent quarters alongside Azure’s expansion, estimated to reach nearly 38% at constant currency.
Despite being in a capital-intensive phase due to AI infrastructure investments, Microsoft’s long-term prospects look promising. The management aims to enhance its data centers and AI capabilities to unlock future revenue streams. There’s potential for revenue to reach about $770 billion by 2036, as infrastructure use ramps up, with high-margin software and AI solutions making up a larger slice of the pie. Additionally, EBIT margins are expected to gradually rise from 46% to 48%.
Microsoft’s solid base of recurring revenue, pricing strength, and established enterprise ecosystem are likely to ensure healthy free cash flow in the long run, notwithstanding present pressures from rising capital costs, depreciation, and spending on AI. The base case DCF valuation suggests an intrinsic stock value of $422 per share, indicating a 13.8% upside from a current price of $370.87. In a bullish scenario, the share price could soar to $578, presenting a potential upside of nearly 56% if AI monetization and capital efficiency accelerate.
Microsoft is seen as a strong long-term investment, especially when the stock price dips below $358. It’s considered particularly attractive around $335 per share.
Previously, in May 2025, Ray Myers discussed the advantages of Microsoft in enterprise software, Azure cloud growth, gaming, and long-term AI potential. Since then, MSFT stock has dropped about 9.13%. Hated Moats Investors echoes similar sentiments, focusing on monetizing AI, valuation upside, and how Microsoft is positioning itself as a compelling buying opportunity near $335 per share.
