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<\/a><\/p>\n\u201cIt carries a premium multiple, and that\u2019s one of the things that has caused it to lag relative to the names it tends to be compared to,\u201d said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, which has about $8 billion in assets and owns Microsoft shares.<\/p>\n
The Nasdaq 100 Index is priced at 26 times profit, while Apple and Alphabet also are both well under 30 times earnings.<\/p>\n
Microsoft\u2019s recent acquisitions – a $19.6 billion deal for Nuance Communications Inc. and a $68.7 billion bid for Activision Blizzard Inc – also might be crimping its shares as Microsoft dips into its cash reserves, while also facing regulatory scrutiny.<\/p>\n
And other tech firms have also fed bulls with news to call home about: Amazon and Alphabet have proposed stock splits while Apple and Nvidia Corp had product events that propped up their shares.<\/p>\n
Microsoft gave a strong forecast for its cloud-computing business in January, and analysts are optimistic about the company\u2019s prospects. Wall Street forecasts revenue growth of 18% for Microsoft this year and double-digit gains in the next three, according to data compiled by Bloomberg. That\u2019s faster than Bloomberg Intelligence\u2019s estimated growth for tech companies in the S&P 500, and for the software sector.<\/p>\n
While investors aren\u2019t flooding back in, analysts believe they will. Its stock has 48 buy ratings, four holds, and no sell recommendations. They are projecting an 18% rally in its shares over the next 12 months, according to data compiled by Bloomberg.<\/p>\n
\u201cThe outlook for Microsoft is outstanding, and overall we\u2019re seeing very solid growth compared with what I would have told you was possible three years ago,\u201d said Pat Burton, co-portfolio manager of the $13.9 billion MainStay Winslow Large Cap Growth Fund, which has Microsoft as its largest holding.<\/p>\n