Microsoft: Odds Increasing For Share Breakdown (Technical Analysis)
Summary
- Microsoft shares are underperforming the market in 2024, with technical indicators suggesting a potential price breakdown below $400 soon.
- Valuations are very high historically, with forward EV to EBITDA of 20x and sales of 11x, indicating the real potential for a 20% to 30% price decline.
- Dividend and free cash flow yields are exceptionally low, making the stock unattractive compared to risk-free Treasury rates.
- AI competition and rising CAPEX costs could flatten growth - I rate Microsoft a Sell, with a price target closer to $300 during 2025.
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