u/479298 ·
Reddit — r/wallstreetbets
· June 18, 2026 at 16:11
· ⬆ 51 pts
· 💬 73 comments
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Summary
The author argues MSFT is undervalued after a selloff, comparing its 0% return since Jan 2024 to Alphabet’s 158% and Amazon’s 58%.
Thesis: MSFT’s P/E of 22 is near 10-year lows, high CapEx in Azure and AI (OpenAI cloud commitment) will pay off, making the recent drop unjustified.
Quality assessment: Moderate DD – uses P/E history and relative performance, but lacks deeper financial or competitive analysis; partially speculation.
Score51
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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. The business is growing, so the recent selloff seems unjustified.
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 at 22, near 10-year bottom (peak 39, avg 30-35); stock flat since Jan 2024 while GOOGL +158% and AMZN +58%. Extreme relative underperformance and low valuation create a mean-reversion and growth re-rating opportunity as Azure/AI investments mature. Buy MSFT LEAPS on weakness; the selloff is unjustified given business growth and AI cloud tailwinds. CapEx overshoot without revenue acceleration, Azure growth disappoints, macro headwinds further compress multiples, OpenAI switch risk.