Microsoft‘s CAPE ratio

The CAPE ratio for Microsoft compares its current stock price to the average inflation-adjusted earnings over the past 10 years. Microsoft, as a dominant player in software and cloud computing, tends to have a higher CAPE ratio due to strong growth expectations. A high CAPE suggests the stock may be overvalued, indicating lower future returns, while a low CAPE could imply undervaluation with potential for growth. Investors use the CAPE ratio to assess Microsoft’s long-term valuation relative to its earnings history, although its strong market position often results in a higher CAPE.