Is MSFT a good stock to buy? We came across a bullish thesis on Microsoft Corporation on Hated Moats’s Substack by Hated Moats Investors. In this article, we will summarize the bulls’ thesis on MSFT. Microsoft Corporation’s share was trading at $411.74 as of June 8th. MSFT’s trailing and forward P/E were 24.82 and 21.46 respectively according to Yahoo Finance.
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Microsoft Corporation develops and supports software, services, devices, and solutions worldwide. MSFT is viewed as one of the highest-quality enterprise software and cloud businesses globally, with its investment thesis increasingly centered around artificial intelligence, Azure cloud growth, and its strategic relationship with OpenAI. The company continues to benefit from strong demand across Microsoft 365, Intelligent Cloud, and AI workloads, with FY2027 revenue expected to grow 15% following multiple quarters of mid-to-high teen growth and Azure expansion approaching 38% in constant currency.
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While Microsoft is currently operating through a capital-intensive AI infrastructure cycle, the long-term outlook remains compelling as management continues scaling data centers and AI capabilities to support future monetization opportunities. The valuation framework assumes revenue could expand to nearly $770 billion by FY2036 while EBIT margins gradually improve from 46% to 48% as infrastructure utilization rises and higher-margin software and AI services become a larger portion of the mix.
Despite near-term pressure from elevated capex, depreciation, and AI investment spending, Microsoft’s recurring revenue base, pricing power, and entrenched enterprise ecosystem support sustained free cash flow generation over time.
The base-case DCF valuation produced an intrinsic value of $422 per share, implying 13.8% upside from the analyzed share price of $370.87, while the bull case reached $578 per share, representing 55.85% upside if AI monetization and capital efficiency improve faster than expected. Microsoft is viewed as an exceptional long-term compounder, with the stock becoming increasingly attractive below $358 and viewed as a compelling buy opportunity near $335 per share.
Previously, we covered a bullish thesis on Microsoft Corporation by Ray Myers in May 2025, which highlighted Microsoft’s enterprise software dominance, Azure cloud growth, gaming expansion, and AI-driven long-term opportunities. MSFT’s stock price has depreciated by approximately 9.13% since our coverage. Hated Moats Investors shares a similar view but emphasizes on AI monetization, valuation-driven upside, and Microsoft becoming a compelling buy opportunity near $335 per share.
Microsoft Corporation is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 282 hedge fund portfolios held MSFT at the end of the first quarter which was 312 in the previous quarter. While we acknowledge the risk and potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
