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Stonkometer: Microsoft valuation, my model
Fact Key numbers from SEC filings
Market value$3.94T$530.14 a share on 2026-10-29
Revenue, last 12 months$346.4BQ1 FY27: $92.3B, up 19%
Operating income, Q1 FY27$45.9B50% of revenue
Microsoft Cloud, Q1 FY27$63.9Bup 30%; Azure up 48%
Capital spending, Q1 FY27$39.4Bcash spent on property, before finance leases
Net cash$29B30 Sep 2026, before $71.0B of finance leases
Value over time
Total market value
$1T$2T$3T$4T$5T
Nov 25Feb 26May 26Aug 26
$3.94T +2% since Oct 2025
$1T$2T$3T$4T$5T
202420252026
$3.94T +57% since Oct 2023
$1T$2T$3T$4T$5T
20222023202420252026
$3.94T +58% since Oct 2021
$1T$2T$3T$4T$5T
200920122015201820212024
$3.94T 14x since 2008
Total value, not price per share: share counts change with fundraising, stock pay and splits.
What today's market value implies
If Microsoft is worth $3.94T today, our model says this has to happen by 2036:
Revenue in 2036$982B2.7x today's $369B, growing 10% a year
Net profit in 2036$354B3.2x what Apple earned in 2025 (about $110B)
Operating margin in 203646%our middle-case margins for each business line
Value today / revenue11xthe S&P 500 average is about 3x
Growth vs our middle case-1 ptsa year, on every business line
Assumption Solved from our model: middle-case margins, 26x earnings in 2036, a 9.0% required return and 0% new shares a year. The lab below opens on this "market's view"; change any number there.
Assumption Starting cases are Stonkometer values, not forecasts. The needle reads your inputs. Not sure what to assume? Answer 6 quick questions.
The market price needs about 1 points less growth a year than our middle case, on every business line.
Revenue by business line
Scenarios vs today
Defaults and conventions
Fact Revenue, cash, debt and share counts come from the filings or reports listed under Sources (data as of 2026-10-29).
Fact Currency: nominal US dollars. All four companies report in US$, so there is no FX conversion.
Assumption Inflation is not a separate input: growth rates and the risk-free rate are nominal, so they already include it.
Assumption Risk-free rate 5% (the 10-year US Treasury yield was 4.99% on 26 Oct 2026); risk premium 4%; required return 9% a year.
Assumption Tax 21% on profits (US federal rate); dilution 0% a year; 10-year horizon; magic revenue earns 30%.
Assumption Today's operating margins per business line (Agents and Infra 50%, Devices and Consumer 32%) are Stonkometer estimates from the latest filings.
Assumption Bear, middle and bull values and bet sizes, margins and chances.
Change any of them in Advanced mode. Full list on the method page.
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Build your assumptions: 6 questions
Not sure what to put in the sliders? Answer in plain terms: prices, customers, and how much the big risks worry you. Each question starts with a Fact (or Our view for rough benchmarks); your answer is your Assumption. The answer choices are ours, and skipped questions use the middle one.
0 of 6 answered
Moonshot explorer Our view
Markets that don't exist yet but could one day pay Microsoft. Each one is valued like an option: the chance it happens, times the profit if it does, discounted back to today. The market sizes, shares, chances and dates are our guesses: move them, and switch on the ones you believe in to add them to your model.
Quantum computing on Azure
Majorana topological qubits, if they work, offered as a cloud service for chemistry and materials.
Fact Microsoft unveiled the Majorana 1 chip in February 2025; scientists still debate the results.
What would have to be true:
Topological qubits proven to work
A machine with enough of them
If it happens: Microsoft earns $38B a year from 2033, worth $237B then at 20x profit. Weighted by a 12% chance and discounted to today: $16B.
Digital workers
AI agents that do whole office jobs, billed like staff rather than software seats.
Fact Microsoft 365 commercial cloud revenue grew 18% in Q1 FY27, helped by Copilot.
What would have to be true:
Agents reliable enough to work unsupervised
Companies pay per job done
If it happens: Microsoft earns $150B a year from 2031, worth $830B then at 20x profit. Weighted by a 25% chance and discounted to today: $135B.
Cloud gaming everywhere
Xbox games streamed to any screen, with AI-made game worlds.
Fact Xbox content and services fell 2% in Q1 FY27.
What would have to be true:
Streaming as good as a console
People pay a subscription for it
If it happens: Microsoft earns $25B a year from 2030, worth $79B then at 20x profit. Weighted by a 25% chance and discounted to today: $14B.
Switch on the moonshots you believe in to add their value to your model above.
Value today = chance x (market x share) x margin x (1 - tax) x 20x profit, discounted from the start year at your required return and shrunk for dilution. Margins are our view: Quantum computing on Azure 40%, Digital workers 35%, Cloud gaming everywhere 20%.
Azure cloud, Microsoft 365 and Copilot AI agents for businesses, plus Windows, Xbox, LinkedIn and Bing. Below is a valuation lab built on its latest SEC filings. It opens on what today's price implies; pick another scenario or move the sliders, and the Stonkometer compares today's price with your numbers. Assumption Our middle case puts Microsoft at $4.08T against a market value of $3.94T. It is a starting point, not a forecast; yours will differ, and that is the point.
Fact from filings or reports, sourced below · Assumption a Stonkometer default you can change · Our view opinion
Big claims, checked
Fact Each claim is quoted with its source. The maths shows what would have to be true; the slider defaults are assumptions.
Amy Hood, Microsoft CFO (Oct 2026)
“Microsoft Cloud revenue of $63.9 billion, with growth accelerating to 30%.”
About 69% of Microsoft's revenue in the quarter.
Microsoft 10-Q (Sep 2026)
“$677 billion of commercial contracts not yet delivered, up 73% in a year.”
More than two years of Agents and Infra revenue at today's pace, with a weighted duration of about 2.3 years.
Microsoft 10-Q (Sep 2026)
“$364.6 billion of data-centre leases signed that have not started yet.”
They start between fiscal 2027 and 2034 and are not yet on the balance sheet.
Who owns it, who controls it
Fact One class of common stock: one vote per share.
Economic interest
85.2%
Vanguard 7.5%
BlackRock 7.3%
Other shareholders 85.2%
Shareholder votes
85.2%
Vanguard 7.5%
BlackRock 7.3%
Other shareholders 85.2%
Who picks the board
all
All shareholders, one share one vote all
No one controls Microsoft. Satya Nadella is chair and CEO; 11 of the 12 director nominees are independent.
What Microsoft owes, what it holds, and the spending it has already signed up for. Contracts for compute and infrastructure are not debt on the balance sheet, but they must be paid like it.
Cash and investments$64.5B30 Sep 2026
Debt$35.5Bincluding finance leases
Net cash$29.0Bcash minus debt
Spending commitments$365Bdata-centre leases signed but not yet started, beginning between fiscal 2027 and 2034; purchase obligations are published only once a year
Commitments / revenue1.1xrevenue, last 12 months: $346B
Finance leases already running add $71.0B of obligations on top of the debt above.
Cash and short-term investments fell from $76.8B to $64.5B in the quarter as capital spending reached $39.4B.
Microsoft has funded $12.0B of its $13.0B commitment to OpenAI.
Revenue was $92.3B in the quarter to 30 September 2026, up 19%. Operating income was $45.9B, half of revenue.
From September 2026 Microsoft reports two segments: Agents and Infra ($76.8B, up 25%) and Devices and Consumer ($15.5B, down 3%).
Microsoft Cloud revenue was $63.9B, up 30%, and Azure grew 48%. Commercial contracts not yet delivered rose 73% to $677B.
Microsoft owns about 24% of OpenAI on an as-converted basis and earned $10.0B of revenue from OpenAI in the quarter.
Cash spent on property and equipment was $39.4B in the quarter. Data-centre leases signed but not yet started total $364.6B, starting between fiscal 2027 and 2034.
It returned $10.2B to shareholders through dividends and buybacks.
Key risks Fact
AI data-centre spending must earn its cost back; leases already signed add $364.6B over the next decade.
OpenAI is both a big customer and a partner whose own plans could change.
Copilot and agent pricing could fall as AI models get cheaper and competitors give AI away.
Windows and devices are shrinking (down 22% in the latest quarter).
Antitrust scrutiny of cloud licensing and bundling in the US and Europe.
The company's own risk factors, summarised in plain English. Read the originals below.
The business lines in the model
Agents and Infra (Azure, Microsoft 365, Copilot)$283B last 12 months (to 30 sep 2026), $307B on the latest basis
New segment from September 2026: Azure, Microsoft 365, Copilot agents, Dynamics and server software. Up 25% in Q1 FY27 with 52.8% operating margin; Azure up 48%.
Devices and Consumer (Windows, Xbox, LinkedIn, Bing)$63B last 12 months (to 30 sep 2026), $62B on the latest basis
Windows licences and Surface, Xbox, LinkedIn, Bing and Edge ads. Down 3% in Q1 FY27 with 34.6% operating margin; Windows OEM and devices down 22%.
Bet: AI agents doing whole jobs
Copilot agents that work across Microsoft 365 and business software, sold per seat or per task.
Bet: Quantum computing (Majorana)
Topological qubit chips in research; offered through Azure Quantum. No product revenue yet.
Last 12 months (to 30 Sep 2026): Recast fiscal 2026 segments plus the September 2026 quarter, less the year-earlier quarter. Latest quarter x 4 (Q1 FY27): Quarter to 30 Sep 2026 x 4. Microsoft's year ends on 30 June. Cash and short-term investments $64.5B, less $35.5B of debt (30 Sep 2026); $71.0B of finance leases and the ~24% OpenAI stake not included. 7,426M shares outstanding on 22 Oct 2026 (10-Q cover).
Questions people ask Fact
Is Microsoft stock overvalued?
At $530.14 a share Microsoft is worth about $3.94T, around 28 times its last 12 months of profit. Whether that is fair depends on Azure and AI agents; the lab shows what they must deliver.
How does Microsoft make money?
Since September 2026 it reports two segments: Agents and Infra (Azure, Microsoft 365, LinkedIn, Dynamics; $76.8B in the quarter) and Devices and Consumer (Windows, Xbox, Surface, search; $15.5B).
How much of OpenAI does Microsoft own?
About 24% on an as-converted basis, accounted for with the equity method. OpenAI is also a large Azure customer; the lab lets you add an extra return for that relationship.
Not investment advice. Stonkometer is an educational calculator, not investment advice. Valuations depend entirely on the assumptions you choose. We are not a broker or adviser, and nothing here is a recommendation to buy or sell any security. Do your own research and consider a licensed adviser. Full disclaimer