Microsoft (MSFT) DCF: History & Chart

Microsoft Corporation(MSFT)

Software - Infrastructure · Redmond, WA

$493.41-6.29 (-1.26%)

Delayed quote: Sep 8, 2026, 3:45 PM EDT

About Microsoft Corporation

Microsoft Corporation is a prominent global technology firm that invents, markets, and provides ongoing assistance for a diverse range of software, digital services, computing devices, and comprehensive solutions. Its operations are organized into three primary divisions: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment delivers crucial tools for both enterprises and individual users. This includes the extensive Office suite (comprising Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, Microsoft Viva, and Skype for Business), along with popular consumer offerings like Skype, Outlook.com, OneDrive, and LinkedIn. It also features Dynamics 365, a suite of integrated cloud and on-premises business applications tailored for organizations. The Intelligent Cloud division focuses on sophisticated infrastructure and platform services. Here, Microsoft licenses key products such as SQL Server, Windows Servers, Visual Studio, System Center, and associated Client Access Licenses. It also includes GitHub, a leading platform for developer collaboration and code hosting; Nuance, offering advanced AI solutions for healthcare and businesses; and Azure, its expansive cloud computing platform. This segment further encompasses enterprise support, Microsoft consulting services, and Nuance professional services, assisting clients with the development, deployment, and management of Microsoft's server and desktop technologies, alongside offering product training and certification. Finally, the More Personal Computing segment covers a broad spectrum of consumer and commercial computing experiences. It generates revenue through Windows operating system licensing, including agreements with original equipment manufacturers (OEMs), non-volume licensing, and various Windows Commercial offerings (such as volume licensing and cloud services), as well as patent licensing and Windows Internet of Things (IoT). This division also supplies its own hardware, including Surface devices, PC accessories, and gaming/entertainment consoles. Its Gaming portfolio features Xbox hardware, content, and subscription services, in addition to video games and royalties from third-party titles. Furthermore, it manages search services like Bing and Microsoft's advertising platforms. Microsoft distributes its extensive product line via numerous channels, including original equipment manufacturers, wholesale distributors, and various resellers, complementing direct sales through digital marketplaces, its own online storefronts, and physical retail outlets. The company, established in 1975, maintains its headquarters in Redmond, Washington.

Redmond, WA

223,000 employees

www.microsoft.com

Technology / Software - Infrastructure

Sector: Technology
Industry: Software - Infrastructure
CEO: Satya Nadella

View full financials

Microsoft Corporation (MSFT) DCF Valuation

Price is ABOVE the estimated range

$166.98

$288.18

Model scenario range

$493.41

Today's price

TGM's two-stage DCF values Microsoft Corporation (MSFT) between $166.98 and $288.18 depending on assumptions, with a base case of $216.89. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (9.6%) reflects its beta.

What would today's price require?

Growth the price assumes+36.2%/yr

Actual FCF growth, last 5 years+3.6%/yr

$493.41 is justified only if free cash flow grows about +36.2% a year (fading to 2.5% long-run) at a 9.6% required return — faster than the company has actually grown.

Scenario	FCF growth (fading to 2.5%)	Discount	Value / share
Conservative	11.6%/yr	10.6%	$166.98
Base case	14.6%/yr	9.6%	$216.89
Optimistic	17.6%/yr	8.6%	$288.18
Third-party model estimate (FMP)	independent reference · retrieved Sep 8, 2026 · assumptions not provided		$296.07

The FMP figure is a third-party point estimate. Its cash-flow forecast, discount rate, terminal growth, and valuation date are not included in the stored response, so TGMCharts presents it only as a reference—not as an intrinsic-value conclusion or price target.

Price|PE Ratio|FCF Yield|All Metrics

Current Price

$493.41

Market-Implied Growth

+36.2%/yr

vs +3.6% 5Y actual

Model Scenario Range

$166.98 – $288.18

model output — not a price target

MSFT DCF Fair Value Calculator

Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for MSFT (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.

FCF Growth Rate14.6%/yr

Historical FCF CAGR: 3Y 4.0% · 5Y 3.6% · 10Y 10.4%

Discount Rate (WACC)9.6%

Terminal Growth2.5%

Projection Years10yr

Base inputs: FCF $69.3B · 7.43B shares · net debt $19.4B

Estimated Fair Value

$216.89

-56.0% vs $493.41

Current price$493.41

Third-party model estimate (FMP)$296.07

Sensitivity — fair value by discount rate × terminal growth

How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 14.6%/yr FCF growth and 10-year horizon fixed. Green = above today's $493.41; red = below. Your current case is outlined.

WACC ↓ / Terminal →	1.50%	2.00%	2.50%	3.00%	3.50%
7.6%	$265	$285	$309	$339	$375
8.6%	$224	$239	$255	$275	$298
9.6%	$194	$205	$217	$231	$247
10.6%	$171	$179	$188	$198	$210
11.6%	$152	$159	$166	$173	$182