$Microsoft(MSFT)$ Ten years ago, Microsoft was around $50 (split-adjusted), trading at about 21x earnings. The market viewed it as a legacy Windows/Office name that missed the mobile wave, with Azure playing second fiddle to AWS.
Today, it's around $390, still at about 21x earnings. But the underlying business is a completely different story. Intelligent Cloud is running at a ~$135B revenue pace, with commercial RPO around ~$630B, up 99% year-over-year.
What the market is worried about: AI capex pressure, concentration on OpenAI, and the risk that AI could compress the per-seat software model Microsoft was built on.
What might be getting missed: Microsoft isn't just defending those seats—it's turning them into the distribution layer for enterprise AI via Copilot.
With ~$630B already locked in the backlog, the multiple starts to look less like "expensive growth" and more like "cash flow visibility the market is still mispricing."
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
