‘Time to Go All In,’ Says Top Investor About Microsoft Stock

Markets have been volatile lately, and even some of the strongest companies haven’t been spared, with Microsoft (NASDAQ:MSFT) losing roughly a quarter of its value since the start of the year.

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Though the dustup in the Middle East has jolted investors, Microsoft had been dipping well before the outbreak of hostilities at the end of February. The huge capex numbers that Microsoft and its hyperscaler peers are spending have sparked worries that the AI buildout is heading toward bubble territory, along with concerns of shrinking margins and suboptimal returns on investment.

Against this backdrop, one top investor, known by the pseudonym JR Research, believes the recent weakness has opened the door to step in more aggressively rather than stay on the sidelines.

“I can no longer ignore that the current opportunity represents one of the best moments over the past 10 years for us to accumulate aggressively,” declares JR, who is among the top 3% of stock pros covered by TipRanks.

Of course, a lower price alone isn’t enough to make a compelling case. If growth were starting to crack, caution would be warranted. But according to JR, that’s not what’s happening here, with Microsoft remaining “well-anchored as a leading platform and ecosystem leader.”

Moreover, JR doesn’t see any indication that Microsoft’s pricing power will be threatened anytime soon. On the contrary, the investor points out that the company is actually increasing its prices, noting that the new E7 offering – an AI-powered Microsoft 365 bundle – will cost a more expensive $99 per month per user.

JR thinks that the capex concerns miss the mark as well. Despite the high spending figures, the investor cites expectations that the company’s free cash flows are looking to be greater than 20% through the end of the decade.

Connecting the dots, JR isn’t shy about “pounding the table on this market misunderstanding,” as he assigns MSFT shares a Strong Buy rating. (To watch JR Research’s track record, click here)

That’s the prevailing view on Wall Street as well. With 34 Buys and 3 Holds, MSFT boasts a Strong Buy consensus rating. Its 12-month average price target of $582.17 points to an upside of ~57% from current levels. (See MSFT stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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