Where Will Microsoft Stock Be in 2030?

Shares of Microsoft (NASDAQ:MSFT) closed at a record $543.45 on Oct. 13 and slipped about 2% a day later, finishing Oct. 14 at $533.69. The software giant's next earnings report, for its fiscal 2027 first quarter, is due Oct. 28.

My prediction is that Microsoft stock will trade near $730 by the middle of 2030. Specifically, it's my estimate of the price on June 30, 2030, when Microsoft's fiscal 2030 ends. It assumes non-GAAP (adjusted) earnings per share rise about 13% a year from here, and that investors pay about 26 times those earnings then.

That price would be around 37% over the stock's Oct. 14 close, or about 9% a year before dividends. And it needs Microsoft's earnings to rise at just a bit over half the rate they managed last fiscal year.

Image source: Getty Images.

A solid starting point

For the fiscal year that ended June 30, 2026, Microsoft boosted adjusted earnings per share 22% to $17.28. The adjusted number strips out gains and losses on the company's investment in OpenAI.

Notably, growth didn't slow as the year went on. Against the year-ago periods, adjusted earnings per share rose 24% in the fiscal second quarter of 2026 (the period ended Dec. 31, 2025), then 21% in fiscal Q3 and 23% in fiscal Q4. Full-year revenue was $331.8 billion, up 18%, and operating income climbed 21%.

The full-year number also includes a $3.2 billion gain on Microsoft's investment in Anthropic, booked in fiscal Q4. If anything, then, the $17.28 starting point might be a bit generous.

Spending may slow earnings growth

But I don't expect 22% growth to hold. The biggest reason is the cost of building data centers for artificial intelligence.

Microsoft's spending on property and equipment totaled around $116 billion in fiscal 2026, up about 80% from about $65 billion the year before. That spending hits the income statement over time as depreciation, and the charge is already climbing faster than sales. The line on Microsoft's cash flow statement for depreciation, amortization, and other items rose 31% to $38.5 billion last fiscal year, well above 18% revenue growth. And the spending keeps rising. Fiscal Q4's additions to property and equipment were $35.8 billion, over double the year-ago quarter's $17.1 billion.

True, Microsoft is extending the estimated useful lives of its data centers and office buildings from 15 years to 25 years, which spreads out some of that cost. But management said the change should have just a minimal benefit to fiscal 2027 operating income.

"Even as we invest to meet growing demand, full fiscal year operating margins should be down less than a point," CFO Amy Hood said of fiscal 2027 on the company's July earnings call.

Buybacks likely won't help much, either. Microsoft bought back around $22 billion of its stock in fiscal 2026, but its diluted share count hardly moved, at about 7.45 billion against 7.47 billion the year before.

Given all that, I'm assuming adjusted earnings per share grow around 13% a year. Compounded over four years, that could bring the number from $17.28 to around $28 in fiscal 2030.

What will investors pay in 2030?

At $533.69, the stock's price-to-earnings ratio is around 31, using fiscal 2026's adjusted earnings per share of $17.28.

Investors paid far less earlier this year. When shares closed at $352.83 on June 25, their lowest close of the past year, the price-to-earnings ratio was around 21 using the $16.40 in adjusted earnings per share over the previous four quarters.

I'm splitting the difference at 26 times earnings. It's still a healthy price for every dollar of profit, but it lets the price-to-earnings multiple drop as growth cools. Multiply around $28 in adjusted earnings per share for fiscal 2030 by 26, and you get about $730 a share.

Sure, the valuation multiple is the shakier half of this math. If investors pay only the 21 times earnings they paid in June, those same earnings would support a price of around $590, just 11% over the stock's Oct. 14 close.

In the end, I think around $730 is a reasonable target for Microsoft stock by mid-2030, even with earnings growth slowing. The company is in great shape. But at a price-to-earnings ratio of around 31, investors are already paying for much of that growth. And if the spending hurts margins more than management expects, even a 9% yearly return could prove optimistic.

I'd be fine owning shares at this price. But I wouldn't call them a bargain.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.