Could Microsoft Stock Reach $1,000? | MSFT Stock Prediction | MSFT Stock Analysis
Summary
TLDRThis 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
- đ 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.
- đč Microsoft's current stock price is $418 per share, having performed well after a low point around $230 per share in early 2023.
- đ 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.
- đšâđŒ 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.
- đ 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.
- đĄ 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.
- đ 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.
- đą 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.
- đ 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.
- đ 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.
- đŻ 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.
Outlines
đ€ Microsoft Stock Price Prediction for 2030
The video discusses a projection of Microsoft's stock price potentially reaching $1,000 per share by 2030. It starts by acknowledging the current stock price of $418 and highlights the company's strong performance, especially after integrating Open AI's chat GPT into its products. The video then delves into the forward price-to-earnings ratio and the expected earnings per share growth, which is currently forecasted at 16.3% annually for the next five years. The presenter uses these figures to model different scenarios for Microsoft's stock price in 2030, considering various PE multiples and EPS growth rates, and concludes that barring any unforeseen setbacks, Microsoft's stock price is likely to significantly increase.
đč Evaluating Microsoft's Stock Price Trajectory and Potential Headwinds
This paragraph explores various scenarios that could affect Microsoft's stock price by 2030, starting from the current price of $418 per share. It considers different PE multiples, such as 28, 25, and 20, and their impact on the stock price, which could range from $928 to $661 per share. The video also contemplates the effect of varying earnings per share growth rates, with a 6% growth rate still indicating an increase in stock price, while a 4% growth rate might result in a flat or slightly decreased stock price. The presenter predicts that the most likely scenario places Microsoft's stock price between $1,900 and $1,050 per share by 2030, with a midpoint of $1,000. The video concludes by emphasizing the speculative nature of stock predictions and the inherent uncertainties in financial forecasting.
Mindmap
Keywords
đĄMicrosoft stock
đĄStock price prediction
đĄForward PE ratio
đĄEarnings per share (EPS)
đĄOpen AI
đĄReplacement cycle
đĄGrowth rate
đĄWall Street analysts
đĄAI Tech technology
đĄHeadwinds
đĄFinancial analysis
Highlights
Video aims to predict if Microsoft stock could reach $1,000 per share by 2030.
Microsoft's current stock price is $418 per share, with a history of exceptional performance.
Microsoft was an early investor in OpenAI, integrating its technology into cloud services and products.
Analysts expect Microsoft to deliver $13.37 in earnings per share in 2025, up from $11.65 in 2024.
Wall Street analysts project a 16.3% earnings per share growth for Microsoft over the next 5 years.
Microsoft stands to benefit from the replacement cycle of personal computers purchased during the pandemic.
The replacement cycle for personal computers is expected to peak in 2025 and 2026.
New computers infused with AI technology will entice upgrades from those who bought PCs in 2020 and 2021.
Microsoft's position in benefiting from AI and the PC replacement cycle is highlighted as a strong trend.
Applying a 16% growth rate to projected earnings results in a 2031 EPS forecast of $338.
If the current valuation remains, Microsoft stock could reach $1,388 by 2030.
Different valuation multiples result in varying stock price predictions for 2030.
A decrease in valuation to 28 could result in a 2030 stock price of $928.
A valuation of 25 could see the stock price rise to $827 per share by 2030.
The lowest scenario with a 20 valuation multiple predicts a 50% increase to $661 per share.
Microsoft's stock price is expected to rise as long as EPS growth is at least 6%.
The most likely scenario predicts a 2030 stock price between $1,900 and $1,050, with a midpoint of $1,000.
The video emphasizes the unpredictability of stock price predictions and the reliance on analyst estimates.
Transcripts
hey everyone in this video I'm going to
look at Microsoft stock and answer
whether or not I think Microsoft stock
could reach $1,000 per share by the year
2030 and offer different scenarios for
where Microsoft stock could be in 20s so
this is kind of like a stock price
prediction video for Microsoft stock so
without further Ado let's jump right
into this anal I want to thank the mle
fo for sponsoring this video visit
full.com parev for the 10 best stocks to
buy now some of the numbers I'm going to
need for one is Microsoft's current
stock price right now it's trading at
$418 per share you can see the stock
price has performed exceptionally well
after bottoming out around $230 per
share early in 2023 of course Microsoft
was one of the early investors in open
Ai and it's incorporating open AI chat
GPT into its Suite of cloud services
into its Suite of products and that's
providing a huge boost for Microsoft and
its share price in recent months also
I'm going to need Microsoft's forward
price to earnings ratio currently it's
trading at a forward PE of
that are following Microsoft stock they
think it's going to deliver
$13.37 in earnings per share in
20125 that's going to be up from
$11.65 in 2024 so analysts on Wall
Street are optimistic about Microsoft's
earnings per share prospects over the
next few years to be sure now looking at
longer term analysts on Wall Street are
expecting Microsoft to generate 16.3%
earning earnings per share growth each
year for the next 5 years on top of the
growth that they're expecting over the
next two years into
2025 as I mentioned already the analysts
on Wall Street that are following
Microsoft stock are optimistic about its
forecast about its Outlook in addition
to Microsoft's position in benefiting
from the rising effectiveness of AI
Microsoft is also in a position to
benefit from the replacement cycle of
personal computer
remember in 2020 and 2021 there was a
surge in purchases of personal computers
because now people were working from
home learning from home entertaining
from home and they needed more personal
computers to accomplish those Feats now
that created a gap of purchases because
if you bought a computer in 2020 and
2021 you're probably not going to need
one in 2022 you're not going to need one
in 2023 these are long lasting Goods
they last anywhere between 4 to 6 years
so in 2024 this is the start of that
replacement cycle from the computers
that were purchased in 2020 just the
beginning just the first year of that
replacement cycle that's going to enter
into the peak phase next year in 2025
and in 2026 as those computers purchased
in 2020 and 2021 start to show their age
and these newer computers that are
getting infused with AI Tech technology
are going to be more enticing to those
folks that bought computers in 2020 and
2021 they're going to want to upgrade to
those newer generation models that
provide more AI capability so Microsoft
is in an excellent position to benefit
from both of those strong Trends all
right so now that we've got the numbers
that we need to make our stock price
prediction we can start looking at our
model so like I mentioned
$13.37 is what analysts on Wall Street
are expecting Microsoft to earn per
share in
2025 additionally they are expecting
Microsoft to grow by 16.3% per year for
the next 5 years so I'm applying this
16% growth rate to the $13 earnings per
share and I'm extending it out for 6
years to get a 2031 earnings per share
forecast of
$338 I've applied this for 6 years
because I need the 2031 EPS if I want to
get a price for 2030 I need the one year
ahead EPS Target so now I'll draw your
attention here to the right hand side
where I've got the 2031 EPS of 33 and if
I apply it's forward PE multiple which I
got from earlier the current
valuation that will give me a stock
price for Microsoft of
$1,388
to in 2030 so if all else Remains the
Same Microsoft stock is headed on a
trajectory to exceed $11,000 per share
by 2030 and currently it's at $418 per
share so that would mean it more than
doubles from its current share price if
all else Remains the Same if there are
no unanticipated headwinds in front of
Microsoft but if there are some
headwinds and the valuation were to
decrease to 28 instead of 31 then
Microsoft stock price could reach $928
per share by 2030 still not bad more
than double right if that headwind is
even stronger and the valuation Falls
even more down to 25 then Microsoft
stock price could rise nearly double to
$827 per share and finally the lowest
multiple I have applied in this scenario
is 20 and if that scenario were to play
out Microsoft stock price could increase
by roughly 50% to
$661 per share if you'll notice all of
the scenarios I have played out here
have Microsoft stock price increasing
meaningfully from where it's currently
trading the only scenario that would
entail Microsoft stock price falling
would be if its earnings per share
growth rate were to come in
significantly below where it is now if I
were to model an earnings per share
growth rate of just 8% for Microsoft
over the next 6 years
and I keep these multiples where they at
its stock price would still be expected
to rise over the next six years although
by not as much the scenario where the
stock price could fall is if the growth
rate in earnings per share is at roughly
4% in that case the stock price would be
expected to remain roughly flat or maybe
down a little bit so you could see here
that as long as Microsoft grows its
earnings per share by at least 6% the
stock price is likely to be higher 6
years from now and if the stock price
increases by the rate that Wall Street
analyst expect it to grow then its stock
price is likely to be much much higher
than where it's at now so where do I
think is the most likely scenario for
where Microsoft stock price could be by
2030 it's going to be right at the
midpoint of $1,000 so it's I think it's
going to be between one 900 50 and
$1,050 per share or at the midpoint
$1,000 per share so just like the
headline of the video stated Microsoft
stock price could reach exactly $11,000
per share by 2030 by no means take that
to mean that this is some kind of
precise stock price prediction there's a
lot of estimates and assumptions I used
in this stock price prediction take that
with the grain of salt this is only for
informational purposes there is a lot
that could go different and I showed you
if I change the growth rate that could
change the values significantly and
nobody knows what's going to happen in
the future and Wall Street analysts have
known to make mistakes on their forecast
so this is using a lot of Wall Street
analyst estimates so a lot can go wrong
but if all else Remains the Same and
there isn't anything to throw Microsoft
off Target this is where it could end up
in 2030 Before I Let You Go let me tell
you about the greatest deal on YouTube
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you again soon
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