The stock price of Microsoft edged higher to $416.90, supported by strong buying interest from growth-focused funds. Macro sentiment improved after treasury yields eased, adding to tech stock resilience. RSI remains in a healthy range, suggesting no immediate overbought risk. If AI demand drops sharply, obviously, it would be bad for Nvidia, but it could be disastrous for CoreWeave. Nvidia's obligation to creditors is capped at $6.3 billion. It's CoreWeave that's on the hook for the full amount of its debt. With ongoing share repurchases decreasing the float, the share count could trend toward 7.2 billion shares. This would imply an EPS of around $25 per share by 2028. Now, let’s discuss valuation. While Microsoft currently trades at 38 times trailing earnings (based on fiscal 2025 results), its AI monetization narrative justifies a premium valuation. Given Microsoft’s robust growth, superior margins, and strong cash flow generation, we do not expect any significant compression in multiples over the next three years. The stock price of Microsoft is closely correlated with sector ETF QQQ, which showed positive inflows this week. Market strategists expect sustained performance thanks to Microsoft’s diversified service mix and rising AI integration metrics.
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