Microsoft
MSFT is overvalued
NASDAQ · Technology
FAIR PRICE
Updated daily
Model: DCF 50% · Relative 30% · Consensus 20%
Uncertainty: Medium ±20% · band $343.82 – $515.74
$530.14
MARKET PRICE
$429.78
FAIR PRICE
$100.36
MARGIN
FAIR VALUE REPORT · OCT 29, 2026
Microsoft's $10 billion cash flow beat is a bill that moved to next quarter
Free cash flow of $18.6 billion beat forecasts by $10 billion and the stock jumped after hours. The model still says $429 against a $531 price. Between the two numbers sits $5 billion of data-centre spending that arrived late.
READ THE REPORT →HIGHEST WALL STREET TARGET
- 01Azure holding the guided 49-50% growth in the quarter to December 2026 would validate the $677 billion backlog, up 73%, that the Street is paying for.
- 02Capex near $50 billion with free cash flow above $15 billion per quarter would show the $45.2 billion spend was timing, not a loan against future cash.
- 03Thirteen targets issued in the month to 27 October 2026 average $637.08 and were all set before the Azure guidance, leaving room toward the $725 high.
BOTTOM OF THE FPI FAIR VALUE BAND
- 01Free cash flow fell 27% while net income rose 32%, and at $531.01 the stock costs 58.9x free cash flow, the highest in its 2022-2026 record.
- 02Capex guidance of about $170 billion for the calendar year accelerating in January-June 2027 could push quarterly free cash flow below $10 billion.
- 03Insiders sold 28 times for $118.6 million against one $2.0 million purchase, with CFO Amy Hood selling at $498-547 between 14 September and 13 October 2026.
FPI FAIR VALUE $429.15 · FPI fair value of $429.15 sits far below the $725.00 bull anchor and just above the $343.32 bear anchor, because $18.6 billion of quarterly free cash flow included roughly $5 billion of deferred capex.
COMMUNITY BUY ZONE
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Where does the market buy MSFT?
61 investors have set their maximum buying price for MSFT. The community median and buy zone are live — in the Fair Price Index app.
COMMUNITY MEDIAN
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FPI RATING
Stable earnings and revenue and strong profitability across the board.
Analytical data, not an investment recommendation. Updated daily.
How we calculate this ↗MARGIN OF SAFETY
A 20% margin of safety below fair value — the conservative entry level for risk-aware investors.
SAFETY MARGIN
20%
Below fair value
ENTRY LEVEL
$343.82
Fair price × 0.80
DISTANCE
35.1%
Price to entry level
At the current price of $530.14, MSFT trades 35.1% above the conservative entry level of $343.82. This entry level represents a 20% margin of safety below the calculated fair price of $429.78 — a buffer that accounts for estimation uncertainty in the valuation model.
Margin of safety is a risk management concept, not an investment recommendation. The 20% threshold follows Benjamin Graham's value investing framework. Fair price and entry levels are model-based estimates updated daily. Learn more about Margin of Safety ↗
VALUATION HISTORY
SYNCING FEED ▌
P/E RATIO HISTORY
SYNCING FEED ▌
METHODOLOGY
How we calculate MSFT's fair price
Microsoft's fair price of $429.78 is derived from a blended model that combines DCF analysis (50%), relative valuation against Technology peers using metrics like P/E and EV/EBITDA (30%), and analyst consensus (20%). At the current market price of $530.14, MSFT trades 18.9% above its calculated fair value.
DCF MODEL · 50%
Discounted free cash flow analysis based on projected cash flows, discounted at a rate reflecting MSFT's risk profile.
RELATIVE · 30%
Comparing MSFT's valuation multiples against Technology peers to determine if the stock is over or undervalued relative to its industry.
ANALYST · 20%
Aggregated analyst price targets for MSFT, weighted by recency and analyst accuracy.
TRY IT YOURSELF
Want to test your own assumptions? Use our free calculators to estimate MSFT's fair value with your own inputs.
MSFT DCF Calculator
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Graham Number
Enter MSFT's EPS and book value to see the maximum price Benjamin Graham would pay for this stock.
P/E Ratio Calculator
Check how much investors pay per dollar of MSFT's earnings and compare it against sector benchmarks.
EV/EBITDA Calculator
Compare MSFT against peers on a debt-adjusted basis using enterprise value and EBITDA.
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What is the fair price of MSFT?+
Based on our blended model combining DCF analysis (50%), relative valuation against Technology peers (30%), and analyst consensus (20%), the fair price for Microsoft is $429.78. At the current market price of $530.14, MSFT trades 18.9% above its calculated fair value.
Is MSFT overvalued or undervalued?+
Microsoft is currently overvalued based on our valuation model. The stock trades at $530.14, which is 18.9% above the fair price of $429.78. The P/E ratio of 27.6x is a key metric in the valuation.
What is the margin of safety for MSFT?+
With a 20% margin of safety applied to the fair price of $429.78, the conservative entry level for MSFT is $343.82. At the current market price of $530.14, the stock trades 35.1% above this entry level. Margin of safety is a risk management concept from Benjamin Graham's value investing framework, not an investment recommendation.
How often is MSFT's fair price updated?+
We update fair price calculations for MSFT daily after market close. The current fair price of $429.78 incorporates the latest market data and sector multiples.
What factors affect MSFT's fair price calculation?+
MSFT's fair price of $429.78 is derived from DCF analysis (50% weight), relative valuation against Technology peers (30% weight), and analyst consensus (20% weight). Key metrics include P/E of 27.6x, ROE of 33.2%, and dividend yield of 0.69%.
Is MSFT a good buy right now?+
At $530.14, MSFT trades 18.9% above our fair value estimate of $429.78. The stock is currently overvalued. ROE stands at 33.2% (exceptional). Fair Price Index provides valuation data — always do your own research before investing.
Does MSFT pay dividends?+
MSFT has a dividend yield of 0.69%.
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Fair Price Index is for informational purposes only and does not constitute investment advice. Fair value calculations are model-based estimates and may not reflect actual market conditions. Always conduct your own research before making investment decisions.
