Assumptions
Adjust component growth drivers
Office Commercial
FY25 revenue $60.0B
13.0%
Base
Microsoft 365 commercial cloud revenue grew 17% YoY, with Copilot and E5 mix driving ARPU while paid seats expanded 6%.
Office Consumer
FY25 revenue $8.0B
5.0%
Base
Consumer cloud revenue jumped 26% with premium tiers lifting ARPU; subscriptions rose 7% past 90M households.
FY25 revenue $20.0B
10.0%
Base
LinkedIn revenue grew 10% YoY, fueled by marketing solutions while Talent Solutions softened alongside the hiring market.
Dynamics 365
FY25 revenue $33.0B
16.0%
Base
Dynamics 365 maintained high-teens momentum with broad-based demand across workloads and Fabric-driven analytics pull-through.
Valuation Model
Microsoft Corporation (MSFT)
Real-time financial projections and AI-written summary
Enterprise Value
$2.95T
Fair Value $398 | Upside -19.4%
Generating updated DCF summary...
Discounted Cash Flow Model
WACC (Discount Rate)
Terminal Growth
Implied Fair Value
$398
| Metric ($B) | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 |
|---|---|---|---|---|---|---|---|---|---|---|
| Productivity & Business Processes | 137.0 | 154.0 | 171.0 | 188.0 | 204.0 | 219.0 | 234.0 | 249.0 | 265.0 | 281.0 |
| % YoY | — | 12.4% | 11.0% | 9.9% | 8.5% | 7.4% | 6.8% | 6.4% | 6.4% | 6.0% |
| Intelligent Cloud | 132.0 | 163.0 | 199.0 | 238.0 | 279.0 | 321.0 | 369.0 | 421.0 | 477.0 | 536.0 |
| % YoY | — | 23.5% | 22.1% | 19.6% | 17.2% | 15.1% | 15.0% | 14.1% | 13.3% | 12.4% |
| More Personal Computing | 59.0 | 64.0 | 68.0 | 72.0 | 75.0 | 78.0 | 81.0 | 84.0 | 87.0 | 90.0 |
| % YoY | — | 8.5% | 6.3% | 5.9% | 4.2% | 4.0% | 3.8% | 3.7% | 3.6% | 3.4% |
| Total Revenue | 328.0 | 381.0 | 438.0 | 498.0 | 558.0 | 618.0 | 684.0 | 754.0 | 829.0 | 907.0 |
| % YoY | — | 16.2% | 15.0% | 13.7% | 12.0% | 10.8% | 10.7% | 10.2% | 9.9% | 9.4% |
| FCF Margin | 25.5% | 25.5% | 26.0% | 26.5% | 27.0% | 27.0% | 27.0% | 27.0% | 27.0% | 27.0% |
| Free Cash Flow | 83.6 | 97.2 | 113.9 | 132.0 | 150.7 | 166.9 | 184.7 | 203.6 | 223.8 | 244.9 |
| % YoY | — | 16.3% | 17.2% | 15.9% | 14.2% | 10.7% | 10.7% | 10.2% | 9.9% | 9.4% |
| Discount Factor | 0.918 | 0.843 | 0.774 | 0.711 | 0.653 | 0.599 | 0.550 | 0.505 | 0.464 | 0.426 |
| Present Value | 76.7 | 81.9 | 88.2 | 93.9 | 98.4 | 100.0 | 101.6 | 102.8 | 103.8 | 104.3 |
PV of 10yr FCF
$951.6B
PV Terminal Val
$2.0T
Enterprise Value
$3.0T
Equity Value
$3.0T
Revenue Trajectory by Segment
Projected revenue breakdown (10-Year)
| Segment ($B) | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 |
|---|---|---|---|---|---|---|---|---|---|---|
| Productivity & Business Processes | 137.0B | 154.0B | 171.0B | 188.0B | 204.0B | 219.0B | 234.0B | 249.0B | 265.0B | 281.0B |
| Intelligent Cloud | 132.0B | 163.0B | 199.0B | 238.0B | 279.0B | 321.0B | 369.0B | 421.0B | 477.0B | 536.0B |
| More Personal Computing | 59.0B | 64.0B | 68.0B | 72.0B | 75.0B | 78.0B | 81.0B | 84.0B | 87.0B | 90.0B |
| Total Revenue | 328.0B | 381.0B | 438.0B | 498.0B | 558.0B | 618.0B | 684.0B | 754.0B | 829.0B | 907.0B |
Sensitivity Matrix
Impact of WACC & Growth assumptions
| WACC \ Growth | 3.0% | 3.5% | 4.0% | 4.5% |
|---|---|---|---|---|
| 8.4% | $413 | $443 | $480 | $527 |
| 8.9% | $374 | $398 | $427 | $463 |
| 9.4% | $342 | $361 | $384 | $412 |
| 9.9% | $314 | $330 | $348 | $370 |
Investment Recommendation
Thesis & risk assessment
12-month price objective
Current price $494
Represents -15% to -9% vs current price
- Azure AI capacity additions beat targets
- Copilot adoption exceeds 40% penetration
- Cloud margins rebound to 72%+
- Bing AI hits >5% U.S. share
- Gaming synergies >$1B annually
- AI monetization lags investment
- AWS/Google share gains
- Activision or AI regulation
- Prolonged capex drag on margins
- Enterprise IT slowdown
This automated valuation is for informational purposes only and does not constitute financial advice. Outputs depend on user-defined assumptions and may differ materially from future market performance.