Down 30% From Its All-Time High: Why You'll Regret Not Loading Up on Microsoft Stock Right Now

Microsoft (NASDAQ: MSFT) isn't a stock that sells off a lot from its all-time high. It's down 30% from its all-time high right now, something that has occurred twice over the past decade. This makes it a pretty rare buying opportunity, but is Microsoft actually a good buy right now?

I think Microsoft is in a good place as a company and could easily rebound to make it a top stock to buy right now.

Image source: Getty Images.

Microsoft is crushing it from a business standpoint

Microsoft's approach to the AI age is twofold. First, it has its AI product, Copilot, which it has integrated throughout all of its business productivity tools. Now, there are some questions surrounding the effectiveness of this product, but it is generating a ton of money for Microsoft.

In its latest quarter, this segment of its AI business grew its annual recurring revenue to $37 billion, growing at a 123% pace. Anyone who has used Copilot will likely agree that it has some ways to go before rivaling the effectiveness of other AI tools. Still, Microsoft has a solid start and could easily improve this product over the next few years.

The second way is through its cloud computing division, Azure. AI requires a huge amount of computing power, and AI companies are looking to obtain it through the cloud, as it keeps them from having to spend heavily on computing infrastructure. Azure grew at a 40% pace during Q3 of fiscal year (FY) 2026 (ending March 31), and boasts several big-name clients, like OpenAI. Azure is my top reason why Microsoft is a smart buy, as cloud computing is a huge part of the future of AI infrastructure.

As a bonus, Microsoft is a major investor in OpenAI and owns about 27% of the company. If OpenAI goes public in the near future, it could deliver a major payoff for Microsoft, and if it chooses to sell its shares, the proceeds would help fund some of its data center build-out aspirations.

Overall, Microsoft is doing well as a company, with revenue rising 18% and diluted earnings per share increasing 23% during its last quarter. Those are strong results for a strong company, and normally lead to a premium valuation in the broader market. If we valued Microsoft using FY 2027 earnings projections, which begin on July 1, then it's clear Microsoft trades for a decent discount to the S&P 500 (SNPINDEX: ^GSPC).

MSFT PE Ratio (Forward 1y) data by YCharts

At less than 20 times forward earnings, this is the cheapest Microsoft stock has been since the major sell-off at the end of 2022 and into 2023. The S&P 500 also trades for 22 times forward earnings, so this is a pretty decent discount compared to the growth Microsoft is putting up.

I think all of this combines to make Microsoft an excellent investment option right now, and you'll regret not loading up on shares soon, as a rebound is likely in store.

Keithen Drury has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.