Indian Prime Minister Narendra Modi will roll out the red carpet for hundreds of domestic and foreign investors visiting his home state of Gujarat this week for a business event, in one of his last major efforts to draw investments before a re-election bid.
Adobe’s stock (NASDAQ: ADBE) has lost 4% in 2024 as compared to the 1% drop in the S&P500 index over the same period. Further, ADBE stock is currently trading around $572, which is 10% below its fair value of $633 – Trefis’ estimate for Adobe’s valuati
Below is Validea's guru fundamental report for MICROSOFT CORP (MSFT). Of the 22 guru strategies we follow, MSFT rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental moment
Windows is the overwhelmingly dominant operating system running on PCs around the world, and it's been that way for decades. Microsoft's (NASDAQ: MSFT) ubiquitous OS enjoyed a 72% share of the global desktop operating system market at the end of 2023, with Apple's OS X a distant
The best stock market returns accumulate over decades rather than quarters. That's why billionaire investor Warren Buffett cites his longevity as a key supporting factor in his portfolio's massive growth over the last several decades. "It helps to start early and live into your 9
As 2024 begins, there are opportunities and threats across the market. Investors looking to set up their portfolios for success should look at more than what happened in 2023 and instead look at where there's long-term, sustainable business momentum from companies.
Real-time data streaming is changing the way companies use information, and it's growing from a $60 billion market in 2022 to over $100 billion by 2025. In this video, Motley Fool contributor Jason Hall takes a deep dive into Confluent (NASDAQ: CFLT), the leading provider of data
In this video, Motley Fool contributor Jason Hall shares a stunning fact about the "Magnificent Seven" stocks that investors should know before making any investing decisions about these winning stocks. 2023 was a great year for the group, but a longer-term look might open your e
The technology-heavy Nasdaq Composite gained some 43% in 2023. And investors are hopeful it will rally further as excitement continues to increase around generative artificial intelligence (AI) technologies. Expectations about interest rate cuts should also push up the Nasdaq in
One of the most notable changes in the tech landscape over the past year was the advent of generative AI. Sure, artificial intelligence (AI) has been around in some form or fashion for decades, powering a wide variety of everyday activities. The use of facial recognition and voic
Microsoft (
NASDAQ:MSFT
) and the rest of the Magnificent Seven are off to a relatively slow start to 2024. Undoubtedly, the "Mag 7" has been referred to by some outlets as the "Lag 7," a name I do not believe is warranted in the slightest. It's only been one week of trading, after all. And though a weak start isn't a great indicator of what's to come for the rest of the year, I do think the stage could be set for continued gains going into year's end.
Undoubtedly, Microsoft stock is hardly the biggest laggard of the "Mag 7" cohort. The unenviable title of biggest 2024 laggard goes to Apple (
NASDAQ:AAPL
) so far, thanks to two untimely downgrades from big-name analysts on Wall Street.
Though some investors may be inclined to think Apple, the world's largest company, stands to drag down the rest of the market, I'm inclined to believe that AI-savvy firms, like Microsoft, have what it takes to roll with the punches and perhaps maintain its magnificence in the early innings of this mildly bearish start to the year. For this reason, I'm staying bullish on MSFT stock.
Microsoft: AI is Still the Name of the Game in 2024
Through 2023, Microsoft has stood tall, delivering AI news and innovations that investors applauded throughout the year. Indeed, Microsoft Copilot (the firm's AI assistant) has proven quite useful. With new Windows PCs
to sport the "Copilot" key, users have never been this close to a powerful generative AI.
This year, I believe Microsoft (and other tech firms) will try to remove even more friction between users and their generative AI platforms to help entice greater usage from those who would have otherwise gravitated toward a search engine.
Indeed, it's hard to break a habit of going straight to a search engine with one's questions. Whether a physical button on new devices and the inclusion of Copilot on Windows operating systems change this remains to be seen. Personally, I believe a strong case can be made for the new Copilot button being as useful as the Netflix (
NASDAQ:NFLX
) button on modern-day television remote controls.
In any case, don't expect Microsoft to pull its foot off the AI gas in the new year.
Microsoft Stock: What About Its Valuation?
Though the AI narrative has been priced in for a while now, I think there's room for Microsoft to deliver a bit more in the way of surprises, especially when it comes to the actual numbers themselves. This year, we'll get a glimpse of just how much AI can add to the bottom line and perhaps more guidance on what to expect over the longer term. The trillion-dollar question remains: can Microsoft grow into its swollen valuation with its impressive slate of AI tech and talent? Many analysts think it can.
At writing, shares of MSFT go for just shy of 36 times trailing price-to-earnings (P/E). That's a nearly 15% premium to the stock's five-year historical average P/E of around 31.6 times. Given Microsoft's AI edge, a premium is warranted. In my view, a premium north of 25% may not be all that absurd, given AI's longer-term impact on the company’s bottom line.
Jefferies analyst Brent Thill thinks Microsoft could continue to gain this year, with his price target of $450.00 entailing more than 22% upside from Friday's close. Thill went as far as to say that Microsoft boasts the "best AI lineup in software." I couldn't agree more. Microsoft pretty much kicked off the AI frenzy a year ago, after all, with its stake in OpenAI and the advent of Bing AI.
Is MSFT Stock a Buy, According to Analysts?
On TipRanks, MSFT stock comes in as a Strong Buy. Out of 37 analyst ratings, there are 36 Buys and one Hold recommendation. The
average MSFT stock price target is $424.36, implying upside potential of 15.4%. Analyst price targets range from a low of $375.00 per share to a high of $600.00 per share.
Despite last year's magnificent gains (MSFT soared around 60%, outperforming the Nasdaq (
NDX
)), Microsoft still seems primed for even more upside. The highest price target of $600.00 (entailing more than 63% gains from current levels) comes courtesy of Truist Financial's Joel Fishbein.
Indeed, a lot needs to go right for Fishbein's target to come true in 2024. As analysts rush to raise the bar on their price targets for the year, I don't view the Street-high target as far-fetched in the slightest.
The Takeaway: MSFT Will Likely Stay Magnificent in 2024
As Microsoft continues adding to last year's strengths, I expect it's just a matter of time before the software giant snags the title of "world's largest company by market cap" right out of Apple's hands. Apple's in a funk right now, with less clarity on its AI plans.
For Microsoft, it seems to have the clearest AI roadmap of the Magnificent Seven. And for that reason, I expect it to stay magnificent in 2024.
Disclosure
Microsoft executive Dee Templeton has joined OpenAI’s board as a non-voting observer as part of a broader boardroom revamp, Bloomberg News reported on Friday, citing a person familiar with the matter.
Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Microsoft Corporation (Symbol: MSFT), where a total of 250,964 contracts have traded so far, representing approximately 25.1 million underlying shares. That amounts to a
OpenAI and its financial backer Microsoft were sued on Friday in Manhattan federal court by a pair of nonfiction authors who say the companies misused their work to train the artificial-intelligence models behind the popular chatbot ChatGPT and other AI-based services.
With a new year brings a new chapter in the exciting growth of artificial intelligence. AI had a major breakout year in 2023 as OpenAI’s ChatGPT exploded into the public eye in the Spring. Since then, firms across the economy have looked to AI as a source of economic growth and disruption. As the key [...]
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