Microsoft stock (MSFT on the NASDAQ) currently ranks as one of the weakest performers in the closely watched Magnificent 7 group, having tumbled more than 25% over the past year. It slid from a 52-week high of $555 to a low of $356, and it is now hovering close to that 52-week bottom, opening Thursday's session at $365. The stock has been in a steady downtrend since June 1 and has been unable to hold its support level. Worried about a deeper slide, most traders have been keeping their distance from the name.
Should You Buy Microsoft Stock Now?
This week a handful of Wall Street analysts handed Microsoft a buy rating. The talk in the market is that MSFT could soon bottom out and may never revisit these levels again. The optimism comes as the Azure cloud platform is beating both guidance and street expectations. Cloud revenue climbed to $54.5 billion, up 29% year-over-year, and cloud enterprise revenue keeps growing, a number expected to read positively in the next earnings call.
Where the Valuation Stands
At current prices, Microsoft trades at a trailing P/E of around 22x, well below the sector median of roughly 35x. Its price-to-operating cash flow sits at about 16x, also under the sector median of 18x. That is why much of Wall Street is on board, assigning MSFT a buy rating at this level. Despite the steep fall, not a single analyst has slapped a sell rating on the stock, and the average price target stands at $562.
Nadella's Comments Add to the Confidence
Confidence grew further after Microsoft CEO Satya Nadella said in an interview that AI will not wipe out all white-collar jobs.
You can't say, hey, all white-collar jobs are gone, and this could even be a weapon,he said. For long-term investors, accumulating Microsoft stock now, or after a few more dips, could prove rewarding.
