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Microsoft Stock Is Getting Crushed. When To Buy?

Couch Investor•Jul 9, 2026

Summary

Couch Investor provides an analysis of Microsoft, suggesting it is "too cheap to ignore" with a potential upside of over 30% based on a discounted cash flow (DCF) model. Couch Investor addresses market fears regarding the company’s near $100 billion annual capex, noting that unlike many competitors, Microsoft’s core business remains highly lucrative with a 46.8% operating margin. The central thesis is that as AI tokens become cheaper, total usage on Azure will explode, benefiting Microsoft regardless of which specific AI model wins the market because they charge for the underlying infrastructure.

Couch Investor mentions several key stocks with the following outlooks:

MSFT: Couch Investor believes the stock is significantly undervalued with a weighted intrinsic value of $508 and an analyst consensus target of $560. Couch Investor highlights that Azure grew 40% and Copilot adoption is increasing by 250% year-over-year. Despite not personally owning the stock, Couch Investor recommends it as a strong long-term winner in the AI infrastructure space, noting that the bear case price is $326 while the bull case reaches $671.
META: Couch Investor views Meta as an even greater "no-brainer" than Microsoft and mentions that they continue to actively invest in the company. Couch Investor notes that Meta's recent stock surge to $630 is driven by positive sentiment around new model releases like Muse Park 1.1. Couch Investor maintains that Meta remains extremely undervalued relative to its core business strength and cash generation.
NVDA: Couch Investor mentions Nvidia as a high-performing company that currently trades at a reasonable forward PE of 20 times despite its massive market cap. Couch Investor suggests that for a retirement portfolio, Nvidia might be a more attractive option than Microsoft due to its current valuation metrics. Couch Investor points out that Nvidia continues to show strong growth with a PEG ratio of only 0.5, making it a favorite for many investors.

Mentioned Stocks

META
Sentiment: BUYAction: BOUGHT

Reasoning: Couch Investor continues to invest in Meta, describing it as more of a 'no-brainer' and more undervalued than Microsoft. Couch Investor points out that Meta's core business is extremely profitable and sentiment is shifting positively following new AI model benchmarks.

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NVDA
Sentiment: BUYAction: RECOMMENDED

Reasoning: Couch Investor views Nvidia as a high-quality asset trading at an attractive forward PE of 20 and a PEG ratio of 0.5. Couch Investor mentions preferring to add Nvidia to a retirement portfolio over Microsoft due to its relative growth valuation.

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MSFT
Sentiment: BUYAction: RECOMMENDED

Reasoning: Couch Investor believes Microsoft is fundamentally undervalued, with a DCF analysis showing a weighted intrinsic value of $508 (32.5% upside). Couch Investor argues that capex concerns are mitigated by $70B+ in annual free cash flow and that Azure is well-positioned as a model-agnostic infrastructure provider. Everything below the base case of $518 is considered a good entry point by Couch Investor, with a current market price of around $384.

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