Can Investing in Microsoft Stock Double Your Money?
Key Points
Software stocks have been doing poorly this year, but Microsoft's business is by no means in trouble.
It has been generating strong growth, and its bottom line remains robust.
At a lower valuation, the stock could have significant upside.
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Asking yourself whether you think a stock has the potential to double in value is a good exercise for a couple of reasons. Not only does it help you consider the growth potential that a stock possesses, but it also helps you consider its valuation. If a stock appears to have the potential to double in value, that can be a good sign that it's a worthwhile growth investment to pursue.
One tech stock with intriguing growth potential and whose valuation has become more attractive of late is Microsoft (NASDAQ: MSFT). Could buying it today double your money?
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Why the market may be underestimating Microsoft's stock
Since the start of the year, Microsoft's stock has declined by more than 20%. Investors appear concerned about software stocks as a whole and that artificial intelligence (AI) will disrupt their business models.
It's a risk that seems exaggerated, especially given that Microsoft has been enhancing its existing products with AI capabilities. The business itself is still doing well; it posted 18% revenue growth in its most recent quarter (which ended in April). And Microsoft's AI business is now at an annual run rate of $37 billion, up 123% from a year ago. AI is looking like a fantastic growth opportunity for Microsoft, rather than the risk that investors appear to be pricing in.
Over its past four quarters, the company has generated a monstrous $125 billion in profit, putting it in a strong position to continue investing in its growth, including opportunities in AI.
Can Microsoft's stock double in value?
Microsoft's current market cap is around $2.8 trillion, and the stock trades at roughly 23 times trailing earnings. It's not an expensive stock in the tech sector, and with plenty of AI-related growth opportunities, I believe it can rise significantly in value. For it to double in value, its valuation would need to be around $5.6 trillion, which isn't all that extreme, particularly if you're looking at a period of at least five-plus years.
Although many investors appear bearish on Microsoft's stock today, I believe strong fundamentals and a decent valuation will prevail in the long run. This is definitely an investment with the potential to double in value over the next five years. As long as you're willing to be patient and hang on, this can be a terrific stock to buy and hold right now.
Don’t miss this second chance at a potentially lucrative opportunity
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*Stock Advisor returns as of June 22, 2026.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.
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