u/479298 ·
Reddit — r/ValueInvesting
· June 17, 2026 at 19:33
· ⬆ 26 pts
· 💬 61 comments
| View on Reddit ↗
AI Summary
Summary
The post argues Microsoft (MSFT) is undervalued after a 0% return since Jan 2024 vs. Alphabet's 158% and Amazon's 58% gains; a P/E of 22 is near its 10-year low.
The author’s thesis leans on Azure growth, OpenAI's cloud obligation, and high CapEx being a catalyst rather than a risk. He has bought LEAPS and plans to add more.
Quality: Speculation backed by basic valuation comps and qualitative AI/cloud tailwinds, but lacks granular financial modeling. Not deep DD, but reasoned conviction.
Score26
Comments61
Upvote %76%
▶ Full Post Text
After the recent selloff for Microsoft stock i compared it to the performance of Alphabet and Amazon going back to January 2024.
While Microsoft has returned 0% since January 2024, Alphabet has gained 158% and Amazon 58% in the same timeframe.
Microsoft has a current P/E ratio of 22, which has been the bottom within the last 10 years, peaking at 39 four times. The average has been around 30-35.
In conclusion i see Microsoft as very cheap considering the current stock price. Sure CapEx has been high, but the investments will show in Azure growth. OpenAI is obligated to run ChatGPT on Microsoft Cloud, as long as there is capacity available. Besides AI there is still a lot of room for Cloud usage in general, so i dont see a realistic risk of these investments turning into a problem.
Bought Leaps 2 weeks ago, bought again last friday and will do so again if the stock keeps falling / stagnating.
Whats going on here?
MSFT P/E of 22 is at the bottom of its 10-year range; stock has returned 0% since Jan 2024 while peers surged 58–158%. High CapEx on Azure/OpenAI is a long-term growth driver. Extreme relative underperformance and depressed valuation create a mean-reversion opportunity as Azure revenue and AI adoption accelerate. Author is buying LEAPS repeatedly, betting that current pricing ignores durable competitive advantages and future earnings growth. Broader market correction (commenter warns of 7–10% drawdown taking MSFT to 300–320); CapEx overshoot if Azure growth disappoints; regulatory or competitive pressure on OpenAI relationship.