Many investors are kicking. Microsoft (NASDAQ: MSFT ) to stop. That’s down about 20% year-to-date as a partner. Tech stocks Continue the rally. gave State Street Technology Select Sector SPDR ETFThe 28% year-to-date rally really captures how far Microsoft has fallen in the eyes of many investors.

However, it may be too soon to count Microsoft out, especially since its strong fundamentals remain intact.

Will AI create the world’s first billionaire? Our team just released a report about a little-known company called an “inevitable monopoly” that provides critical technology that both Nvidia and Intel need. Continue »

Microsoft is still gaining market share thanks to AI.

Perhaps some growth investors have abandoned Microsoft because it isn’t doubling revenue year over year like some of the top performers. AI stock. However, it is still gaining strength over its peers thanks to AI, which has translated into steady financial growth.

Microsoft’s third-quarter fiscal 2026 revenue rose 18 percent year-over-year. CEO Satya Nadella said the company’s AI business reached an annual revenue run rate of $37 billion, a 123 percent year-over-year increase. Microsoft Cloud was once again the biggest driver of growth, growing 29 percent year-over-year.

Microsoft is also ahead of the curve in agent AI, with Copilot and AI agents integrated into many Microsoft products. The company’s AI investment has directly translated into increased revenue and profitability. Microsoft’s net income rose 23 percent year-over-year, showing it can expand profit margins while gaining market share.

The prognosis is extremely low.

The value of the stock affects whether it is a good deal. If the stock had a 100 P/E ratio, Microsoft’s growth numbers would not be impressive. This is a very high price compared to some of the fastest growing companies. However, Microsoft trades at just a 23.3 P/E ratio. The company’s P/E ratio remained in the mid-30s for most of 2025.

Tech investors have been spoiled by troubling earnings and net income growth rates. This makes Microsoft’s numbers feel pedestrian, but it’s this setup that creates deep value opportunities.

Grandview Research projects a 16% CAGR for the cloud computing market from now to 2033. Microsoft is outpacing that growth rate, and as the cloud continues to grow, it will continue to make up a larger portion of Microsoft’s total business. As it happens, some of Microsoft’s underperforming parts won’t drag the company down as much, which will translate into higher growth numbers going forward.

Many of the “Magnificent Seven” stocks have lower P/E ratios than they did a few years ago. Microsoft is the second-cheapest stock among these options, just outside of it. Meta platforms’ 20.6 P/E ratio, another stock that has been surprisingly dismissed by many investors despite its strong fundamentals.

Value isn’t always recognized immediately, and this gives Microsoft investors an opportunity to buy shares at bargain prices before the next rally.

Miss Nvidia in 2009? This rare signal is flashing again.

In 2009, a “double down” signal flashed for a little-known chipmaker called Nvidia. If you invested $5,000, You would be sitting on $2,758,545. today.*

Now, for the first time in years, the same “Complete sentence” cue Shining for a company 1/100th the size of Nvidia. It’s a key player in the $1.8 trillion space race, and with the stock sitting 20% ​​off its recent highs, the window to get there early is closing fast.

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*Stock Advisor returns on June 9, 2026

Mark Goberti No positions in any of the stocks mentioned. The Motley Fool holds and recommends positions in MetaPlatforms and Microsoft. The Motley Fool has one Disclosure Policy.

Is Microsoft a Deep Value Stock? Originally published by The Motley Fool.