When everyone runs into the same room at the same time, the room gets incredibly expensive. Microsoft's "independent market" run isn't because of a sudden spike in earnings. It is because it is used as a corporate blanket.
Microsoft is spending over USD 14 billion a quarter on AI data centres and the consumer revenue to justify that spend is arriving on a tricycle, not a rocket ship.
Right now Microsoft's Forward P/E ratio sits around 25.5x. This means that investors are paying a premium compared to the average US software industry forward P/E which is much lower at 16x. You are paying top dollars for future promises.
Microsoft is a phenomenal business but it is overvalued. Take profits & wait for it to drop before buying back.
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.
- PhoebeReadeΒ·08-07 17:5225.5x vs 16x and people still call this defensive lol where's the margin of safetyLikeReport