Could Microsoft Stock Reach $1,000? | MSFT Stock Prediction | MSFT Stock Analysis

Summary

This video explores the potential for Microsoft's stock to reach $1,000 per share by 2030, analyzing current performance and future growth prospects. With a current price of $418, the video considers factors like AI integration and PC replacement cycles, projecting earnings per share growth and applying different PE ratios to estimate future stock prices. The most likely scenario predicts a price between $900 and $1,050, emphasizing the importance of continued earnings growth and the inherent uncertainties in such predictions.

Takeaways

• 📈 The video discusses the potential for Microsoft's stock to reach $1,000 per share by 2030, offering different scenarios based on various growth rates and valuations.
• 💹 Microsoft's current stock price is $418 per share, having performed well after a low point around $230 per share in early 2023.
• 🔍 Microsoft was an early investor in OpenAI and is integrating AI technologies like Chat GPT into its cloud services and products, which is boosting its share price.
• 👨‍💼 Analysts expect Microsoft to deliver $13.37 in earnings per share in 2025, up from $11.65 in 2024, showing optimism about the company's earnings prospects.
• 📊 Wall Street analysts project an average annual earnings per share growth of 16.3% for Microsoft over the next five years, beyond the growth expected until 2025.
• 💡 The video highlights the potential benefits Microsoft could gain from the rising effectiveness of AI and the replacement cycle of personal computers purchased during the pandemic.
• 📚 The replacement cycle for PCs is expected to start in 2024 and peak in 2025 and 2026, which positions Microsoft to capitalize on the demand for newer AI-infused computers.
• 🔢 Using a 16% growth rate on the expected earnings per share, the video projects a 2031 earnings per share forecast of $338, which could lead to a stock price of $1,388 in 2030 with the current valuation.
• 📉 If valuations decrease, the stock price could be lower, with scenarios ranging from $928 per share at a 28 PE ratio to $661 per share at a 20 PE ratio.
• 📈 The video suggests that as long as Microsoft's earnings per share grow by at least 6%, the stock price is likely to increase in the next six years.
• 🎯 The most likely scenario presented is that Microsoft's stock price could be around the midpoint of $1,000 per share by 2030, but this is subject to change based on various factors and assumptions.

Q & A

What is the main topic of the video?

The main topic of the video is to analyze Microsoft stock and predict whether it could reach $1,000 per share by the year 2030.

What is the current stock price of Microsoft according to the video?

The current stock price of Microsoft is $418 per share.

What was the lowest stock price of Microsoft in 2023?

The lowest stock price of Microsoft in 2023 was around $230 per share.

How has Microsoft's investment in OpenAI impacted its stock price?

Microsoft's investment in OpenAI and the incorporation of OpenAI's chat GPT into its cloud services and products has provided a huge boost to Microsoft and its share price in recent months.

What is the expected earnings per share (EPS) for Microsoft in 2025 according to Wall Street analysts?

Wall Street analysts expect Microsoft to deliver $13.37 in earnings per share in 2025.

What is the projected compound annual growth rate (CAGR) for Microsoft's earnings per share over the next 5 years?

The projected CAGR for Microsoft's earnings per share over the next 5 years is 16.3%.

What is the potential impact of the personal computer replacement cycle on Microsoft's stock price?

The personal computer replacement cycle, starting in 2024 and peaking in 2025 and 2026, could significantly benefit Microsoft as older computers purchased in 2020 and 2021 are replaced with newer AI-infused models.

What is the highest stock price forecast for Microsoft in 2030 if all goes well according to the video?

If all goes well and maintains the current trajectory, Microsoft's stock price could reach $1,388 by 2030.

What could be a scenario where Microsoft's stock price does not increase significantly by 2030?

A scenario where Microsoft's stock price does not increase significantly would be if its earnings per share growth rate comes in significantly below the current expectation.

What is the video creator's most likely prediction for Microsoft's stock price by 2030?

The video creator predicts that Microsoft's stock price will most likely be between $1,900 and $1,050 per share by 2030, with a midpoint of $1,000 per share.

What disclaimer does the video provide regarding the stock price prediction?

The video provides a disclaimer that the stock price prediction is based on a lot of estimates and assumptions, and that there are many factors that could change the outcome. It is for informational purposes only and should be taken with a grain of salt.