Is Microsoft Stock Still Worth Buying?

In a year in which the S&P 500 has ground sideways, stodgy, old Microsoft (MSFT) — the Big Tech company everyone used to love to hate – has quietly been hitting new 52-week highs and is up nearly 20% year to date. Sure, that’s nothing compared to Alphabet (GOOGL), which is up by nearly half. But Microsoft stock is beating the pants off of Apple (AAPL), which is barely up 5% in 2015. Softy is back, and CEO Satya Nadella is steering the company in the right direction with his “mobile first, cloud first” strategy. But with Microsoft shares now trading for 37 times earnings, has the stock price lost touch with reality?

After all, this is a company whose iconic product — the Windows operating system — is tied to a declining PC market. So, what’s the verdict? Is Microsoft stock, despite its run-up, still a buy? Absolutely. The risk in owning Microsoft at this point is simply the risk of a broad market sell-off. If that is something that concerns you, consider putting on a stop loss.But given that Microsoft’s reinvention is still in the early stages, I certainly wouldn’t be in any hurry to sell.

Source: Charles Sizemore

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