Microsoft stock has been on a nearly unimpeded rally over the past two years and has beaten the S&P by a wide margin.
But in this time, Microsoft's earnings haven't grown much at all. Earnings growth is weighed down by declining margins, the strong U.S. dollar, and slowing emerging market growth.
At 19 times forward earnings, Microsoft stock is valued at levels not seen in years. As hard as this is to say, I think Microsoft is overvalued right now.
Tech giant Microsoft (NASDAQ:MSFT) has traditionally been one of the cheapest blue chip tech stocks. For many years, Microsoft was dogged for its over-reliance on the personal computer, and this pervasive bearishness kept