Money isn't exactly "cheap" right now. If you've looked at the cost of microsoft stock lately, you’ve probably noticed the price tag is hovering around $460. Specifically, as of January 16, 2026, the ticker closed at **$459.86**.
It's a lot of dough for a single share. Honestly, it's enough to make any casual investor pause. But in the world of big tech, price is often just a distraction from value.
The story of Microsoft over the last year hasn't been a straight line up. Far from it. While the S&P 500 had a banner year in 2025—returning about 18%—Microsoft actually struggled to keep pace, trailing slightly with a 17% return. For a company that feels like it owns the future, "matching the market" can feel like a loss.
So, why are people still obsessed with the cost of microsoft stock? Basically, it comes down to a three-letter acronym that everyone is tired of hearing but nobody can ignore: AI.
What Drives the Price of MSFT Today?
When you buy a share of MSFT, you aren't just buying a software company. You're buying a piece of a massive, multi-headed beast.
The OpenAI Factor
Most people know Microsoft partnered with OpenAI. But did you know they actually own roughly a 27% stake in the company? According to recent estimates from analysts like Keithen Drury, that stake alone is worth about $203 billion.
Think about that.
Microsoft didn't just build a chatbot; they bought a front-row seat to the engine room of the next industrial revolution. This partnership is why Goldman Sachs analysts recently slapped a "Buy" rating on the stock with a massive $655 price target. They see an upside of nearly 37% from where we are today.
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The Azure Engine
Cloud computing is the real bread and butter. In fiscal year 2025, Azure revenue blew past $75 billion. That’s not just growth; it’s a stampede.
What’s wild is the growth rate. In the most recent quarter (Q1 of fiscal 2026), Azure and cloud services grew by 40%. To put that in perspective, Amazon’s AWS—the industry leader—only grew about 20%. Microsoft is effectively closing the gap by leveraging AI workloads. Companies aren't just moving their files to the cloud anymore; they’re moving their entire intelligence systems there.
Why the Cost of Microsoft Stock Feels "Expensive"
If you look at the P/E ratio, it sits around 32.7.
Is that high? Sorta.
The historical average for the tech sector is lower, but Microsoft hasn't been "average" since the 90s. When you look at the forward earnings—what analysts expect the company to make next year—the valuation starts to look a bit more reasonable.
The 2025 "Slump"
I use the word "slump" loosely. The stock hit an all-time high of $541.06 back in October 2025. Since then, it’s pulled back to this $460 range.
Why the dip?
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- AI Fatigue: Investors got a bit tired of hearing "AI" in every sentence without seeing it translate to immediate, massive profits for every single sector.
- High Capex: Microsoft is spending a fortune. We’re talking $35 billion in capital expenditures in just one quarter. They are buying chips, building data centers, and laying fiber like there’s no tomorrow.
- Supply Constraints: Demand for their AI services is actually outpacing their ability to provide it. They can't get enough GPUs (the brains of AI) to keep up with the customers banging on their door.
What Real Experts Are Saying Right Now
Not everyone is a cheerleader. While Wedbush’s Dan Ives remains incredibly bullish—predicting that the "power-packed combo" of Copilot and Azure could add $25 billion in sales by the end of 2026—others are more cautious.
Gartner recently warned that up to 40% of AI projects might be canceled by 2027 because the costs are outpacing the results. If companies stop seeing the value in "Agentic AI" (AI that can do tasks for you), Microsoft’s massive investments might take longer to pay off than the market likes.
But then you look at the numbers. 100 million monthly active users are already using Copilot across commercial and consumer segments. 26 million people are using GitHub Copilot. These aren't just "pilot programs." These are tools people are paying for.
Is the Current Cost of Microsoft Stock a Fair Entry Point?
Let’s talk strategy. If you’re looking at the cost of microsoft stock and wondering if you missed the boat, you have to look at the timeline.
If you’re a day trader, MSFT is stressful. It’s volatile. One piece of news about a chip shortage or a regulatory hurdle from the FTC can send the price swinging 3% in an afternoon.
But if you’re looking at a 5-year horizon?
The consensus 12-month price target is roughly $625. Some analysts, like those at The Motley Fool, think the stock could top $850 by 2030 if the company hits its goal of $500 billion in annual revenue.
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Key Dates to Watch
If you're tracking the price, circle January 28, 2026 on your calendar. That’s the next earnings report.
This will be the moment of truth. We’ll see if the "Intelligent Cloud" segment continued its 40% growth or if the heavy spending started to eat into the margins too much. CFO Amy Hood has been very clear that they will continue to invest aggressively as long as they see the demand.
How to Handle the Volatility
Buying into a $3.4 trillion company isn't like betting on a penny stock. It’s more like buying a piece of the global economy's operating system.
If you're worried about the cost of microsoft stock being too high right now, consider these moves:
- Check the Forward P/E: Don’t just look at the current price. Look at the price relative to next year's expected earnings ($15.61 per share is the current estimate for FY2026).
- Dollar-Cost Average: You don't have to buy 100 shares today. Buying a little bit every month smooths out the peaks and valleys.
- Watch the Capex: If Microsoft stops spending billions on data centers, that’s actually a bad sign. It means they don't see the demand coming. As long as they are building, they are bullish.
- Monitor Azure vs. AWS: The market rewards the leader in growth. As long as Azure is outgrowing its rivals, the premium price tag on the stock is likely to stay.
Microsoft isn't just a Windows company anymore. It's a cloud company, an AI company, a gaming company (thanks to Activision Blizzard), and an enterprise giant. The cost of microsoft stock reflects that complexity. It’s a premium price for a premium asset.
Whether $460 is "cheap" depends entirely on whether you believe the 500 trillion tokens processed by their Foundry APIs last year is just the beginning. Most signs point to yes.
The next few weeks leading up to the earnings call will be telling. Watch the volume. Watch the guidance. And most importantly, watch how they talk about the return on those massive AI investments. That's what will ultimately move the needle from $460 to $600.
Next Steps for You: Check your portfolio's exposure to the "Magnificent Seven." If you're heavily weighted in tech already, wait for the January 28th earnings report to see if a post-report dip provides a better entry point. If you're under-weighted, look into fractional shares to start a position without needing the full $460 upfront.