NASDAQ: MSFT · Infrastructure Software
Microsoft (MSFT) fair value: undervalued or overvalued?
As of 3 Oct 2026, Faircurve's model values Microsoft (MSFT) at $481.30 a share. The stock last closed at $517.53, which puts the model's fair value 7.0% below the price. On the model's bands that reads as Fairly valued.
Revalued . Price is the close of 2 Oct 2026. Microsoft Corporation.
Faircurve Insights · 3 Oct 2026
Microsoft Corporation is a prominent global technology firm that invents, markets, and provides ongoing assistance for a diverse range of software, digital services, computing devices, and comprehensive solutions.
On 3 Oct 2026, Faircurve's model found a fair value of $481.30 a share, the midpoint of 2,000 simulations. The previous run, on 26 Sep 2026, gave $483.35, so the fair value moved -0.4%. The calibrated range over 63 trading days was $475.81 to $594.84, which held the price 60% of the time at this horizon, and the evidence grade was High.
The business scored 57 out of 100 on overall quality against comparable companies. These comparable companies are Palantir Technologies Inc. (PLTR), Oracle Corporation (ORCL), and Palo Alto Networks, Inc. (PANW). The stock moved +14.7% around its last earnings report on 29 Jul 2026, and the median size of moves around the last 8 earnings reports, ignoring direction, was 6.6%.
Written from the figures on this page for the 3 Oct 2026 valuation and checked by rule before publishing: every number is one printed here, no forecast, no instruction. The price, the gap and the verdict are the page's own and change daily. Not a recommendation.
What price range does the model give MSFT?
The calibrated range for MSFT over 63 trading days is $475.81 to $594.84. It sits around the last close, and its width comes from the volatility that MSFT's own options imply (32% a year), calibrated weekly against realised prices (n = 3,562 past valuations, refreshed 3 Oct 2026). Ranges built this way held the price 60% of the time at this horizon. The fair value is the model's opinion and rides beside the range. It is not the centre of it.
The model's own simulated range, from the 20th to the 80th percentile of its runs, is $356.42 to $642.64. In 42% of the simulations the fair value came out above the price the model ran on.
How does MSFT score on business quality?
Microsoft's overall quality score is 57 out of 100. Each factor below is a score against comparable companies, not a percentile of the metric beside it.
| Factor | Score (0 to 100) | Headline measure | Peer median |
|---|---|---|---|
| ProfitabilityReturn on invested capital against the peer group, with a bonus for an improving trend. | 55 | 22.7%ROIC | 23.2% |
| Earnings qualityHow much of reported profit is cash: free cash flow to net income, and the accrual ratio (the share of earnings that is not cash). | 47 | 0.50xFCF / net income | 0.66x |
| Growth qualityTrailing revenue growth, forward growth from consensus, and the direction of analyst estimate revisions. | 77 | 17.8%Revenue growth, trailing | 16.2% |
| Capital disciplineReinvestment efficiency (capital spending per unit of revenue) and net buybacks. | 25 | 0.6%Net buybacks / market value | 0.9% |
| Balance sheetNet debt to EBITDA and interest coverage. | 53 | 0.52xNet debt / EBITDA | 0.43x |
| StabilityDownside volatility of the EBITDA margin over the last five years. | 83 | 3.0 ptsEBITDA margin downside volatility, 5y | 3.9 pts |
How does MSFT compare with similar companies?
The companies in infrastructure software closest to Microsoft in market value, each on the same model and the same date.
| Company | Last close | Model fair value | Gap | Model verdict |
|---|---|---|---|---|
| PLTR Palantir Technologies Inc. | $188.75 | $150.88 | -20.1% | Overvalued |
| ORCL Oracle Corporation | $142.30 | $152.13 | +6.9% | Fairly valued |
| PANW Palo Alto Networks, Inc. | $403.24 | $396.14 | -1.8% | Fairly valued |
| CRWD CrowdStrike Holdings, Inc. | $270.04 | $235.65 | -12.7% | Data under review |
| FTNT Fortinet, Inc. | $180.95 | $182.20 | +0.7% | Low evidence grade |
| NET Cloudflare, Inc. | $348.96 | $304.50 | -12.7% | Data under review |
| SNPS Synopsys, Inc. | $489.90 | $449.91 | -8.2% | Low evidence grade |
| TWLO Twilio Inc. | $294.58 | $335.52 | +13.9% | Low evidence grade |
All infrastructure software stocks ranked by gap to fair value
When does MSFT report earnings, and how has the stock reacted?
Microsoft's next earnings report is scheduled for 28 Oct 2026. Companies can move their dates.
Options prices on 2 Oct 2026 imply a move of about 2.7% in either direction through the nearest expiry, about 9 days out. That is the size the market is pricing, not a direction. MSFT's 30 day implied volatility works out to about 9.2% over one month.
How MSFT moved around its last 8 earnings reports
Each move runs from the last close before the report to the first close after it, so it covers companies that report before the open and after the close. The median size across these 8 reports, ignoring direction, was 6.6%.
| Report date | Two session move |
|---|---|
| 29 Jul 2026 | +14.7% |
| 29 Apr 2026 | -5.0% |
| 28 Jan 2026 | -9.8% |
| 29 Oct 2025 | -3.0% |
| 30 Jul 2025 | +4.1% |
| 30 Apr 2025 | +8.0% |
| 29 Jan 2025 | -7.2% |
| 30 Oct 2024 | -5.9% |
Microsoft at a glance
Microsoft Corporation is a prominent global technology firm that invents, markets, and provides ongoing assistance for a diverse range of software, digital services, computing devices, and comprehensive solutions.
- Market value
- $3.84T
- Sector
- Technology
- Industry
- Infrastructure Software
- Revenue expected, next twelve months
- $410.2B
- Consensus revenue growth, next fiscal year
- +17.7%
- Analysts with estimates
- 31
- Beta to the US market
- 1.09
- First valued by Faircurve
- 1 May 2026
How the fair value is worked out: the model prices Microsoft on the value of the whole business, debt included, against the operating profit analysts expect next year (forward EV/EBITDA), runs 2,000 simulations across its inputs and takes the midpoint. The full method is documented here.
What changed in the latest valuation?
On 26 Sep 2026 the model's fair value for MSFT was $483.35. As of 3 Oct 2026 it is $481.30, a change of -0.4%. The model revalues every stock it covers each week, and again after an earnings report.
Questions about Microsoft's valuation
Is Microsoft stock undervalued or overvalued?
On Faircurve's model, MSFT reads as Fairly valued as of 3 Oct 2026. The model's fair value is $481.30 a share against a last close of $517.53, a gap of -7.0%.
What is MSFT's fair value?
$481.30 a share as of 3 Oct 2026, the midpoint of 2,000 simulations. The model's own 20th to 80th percentile range is $356.42 to $642.64.
What price range does the model give MSFT?
$475.81 to $594.84 over 63 trading days. Ranges built this way held the price 60% of the time across 3,562 past valuations, refreshed 3 Oct 2026.
When does Microsoft report earnings next?
The next report is scheduled for 28 Oct 2026. Companies can move their dates.
How much has MSFT moved on past earnings reports?
Across its last 8 reports the median two session move was 6.6%, ignoring direction. The largest was +14.7% around the report of 29 Jul 2026.
How confident is the model in this valuation?
The model's evidence grade for MSFT is high. The grade looks at how complete the inputs are, how many comparable companies there are and how closely they agree, and how wide the range of outcomes is. It is not a probability that the fair value is right, or that the price reaches it.