We publish no single base value for Microsoft. Our valuation methods put it between $287.59 and $620.63 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $287.59 | -45.0% | free cash flow $59.96bn, growth 17.91% for 5 years, then fading to 3% over 5 more, discounted at 9.86%; stress floor $130.61 |
| Exit multiple (P/E) | $620.63 | +18.7% | earnings per share $20.01 valued at 30.19× (the stock's own median P/E) in 5 years, discounted back |
| Sum of the parts | — | — | no sum of the parts: 'Productivity and Business Processes' matches no business kind in the house table, so it cannot be valued. The rest are not published without it — a sum missing a part reads as a valuation and is simply wrong |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 1.05 (5 years of monthly returns against the S&P 500; standard error 0.18) |
| Peer beta | 1.11 (median of 6 S&P 500 Systems Software companies) |
| Blend of own and peers | 1.08 (53% own, 47% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 1.05 (0.67 × 1.08 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 9.86% |
Free cash flow grows 17.91% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $59.96bn | — | — |
| Year 1 | 17.91% | $70.70bn | 0.9103 | $64.35bn |
| Year 2 | 17.91% | $83.36bn | 0.8286 | $69.07bn |
| Year 3 | 17.91% | $98.29bn | 0.7543 | $74.14bn |
| Year 4 | 17.91% | $115.89bn | 0.6866 | $79.57bn |
| Year 5 | 17.91% | $136.64bn | 0.6250 | $85.41bn |
| Year 6 | 15.43% | $157.72bn | 0.5690 | $89.74bn |
| Year 7 | 12.94% | $178.13bn | 0.5179 | $92.26bn |
| Year 8 | 10.45% | $196.76bn | 0.4715 | $92.76bn |
| Year 9 | 7.97% | $212.44bn | 0.4292 | $91.17bn |
| Year 10 | 5.49% | $224.09bn | 0.3907 | $87.54bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (9.86% − 3%) | $3.37tn |
| Terminal value in today's money | $1.32tn |
| Present value of years 1–10 | $826.01bn |
| Total present value | $2.14tn |
| Shares outstanding | 7.45bn |
| Value per share = total ÷ shares | $287.59 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth 12.91% | Growth 17.91% | Growth 22.91% |
|---|---|---|---|
| 8.86% | $256.56 | $343.65 | $457.62 |
| 9.86% | $215.97 | $287.59 | $381.05 |
| 10.86% | $185.86 | $246.10 | $324.46 |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 1.05 | 9.86% | $287.59 |
| Peer beta | 1.11 | 10.12% | $275.21 |
| Adjusted beta (used) | 1.05 | 9.86% | $287.59 |
Earnings per share grow on the same fading path as the DCF:
| Year | Growth | Earnings per share |
|---|---|---|
| Now | — | $20.01 |
| Year 1 | 17.91% | $23.60 |
| Year 2 | 12.69% | $26.59 |
| Year 3 | 9.30% | $29.07 |
| Year 4 | 7.09% | $31.13 |
| Year 5 | 5.66% | $32.89 |
| Earnings per share in year 5 | $32.89 |
| Exit P/E (the stock's own median P/E) | 30.19× |
| Value in 5 years = earnings × P/E | $992.96 |
| Discounted at 9.86% over 5 years: ÷ 1.5999 | $620.63 |
We publish no single base value for Microsoft. Our valuation methods put it between $287.59 and $620.63 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
One-year price simulation: a 10% chance the price is below $390.24 and a 10% chance it is above $788.66 in a year; a 59% chance it is higher than today's $523.00, from 27.31% volatility. The simulation assumes the price drifts up at our discount rate of 9.86% a year.
At $523.00 the price implies free cash flow growing 28.7% a year for five years and then fading toward 3% over five more; its revenue has grown 17.9%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $517.53 | — |
| 9 Oct 2026 | $535.07 | — |
| 16 Oct 2026 | $529.05 | — |
| 23 Oct 2026 | $524.51 | — |
| 30 Oct 2026 | $521.91 | — |
| 6 Nov 2026 | $530.61 | — |
| 12 Nov 2026 | $523.00 | — |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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