Should you own Microsoft stock?

BNN Bloomberg’s Market Call featured Black Swan Dexteritas president and portfolio manager Kim Bolton on Dec. 3, who said Microsoft (Microsoft Stock Quote, Chart, News, Analysts, Financials NASDAQ:MSFT) remains a core conviction idea despite recent hesitation among some enterprise customers.

Bolton said a small number of clients have paused incremental cloud infrastructure spending, “not that people are going to stop buying, but they’ve already bought and they want to see how it works before they buy some more.”

He initially worried the update would pressure the stock, calling Microsoft “one of my top picks,” but argued the recent consolidation creates an attractive entry point.

He emphasized that Azure, Microsofts cloud computing platform, still represents roughly 40% of company revenue and that cloud-related capex and capital leases remain “very, very strong,” even as they temporarily compress free cash flow. Bolton expects free cash flow pressure to ease over coming quarters. Valuation, he said, is not stretched.

“Its forward P/E and EV-to-sales multiples are in line with their five-year averages, so it is a good time to buy a leader.”

Bolton framed Microsoft’s competitive position as broad-based.

“They have so many horses in the race — leadership in software, leadership in hardware, leadership in AI.”

He noted shares trading around US$485–490 versus an average Street target of US$625.

“Even though people talk about this market being pretty rich, there’s $125 on the table that’s 20%–25% this year.”

Microsoft shares have gained 11.9% over the past 12 months and 116.9% over five years. Of the analysts covering the stock, 71 rate it “Buy,” two “Hold,” and none “Sell,” with a consensus price target of US$631.42.

The shares closed Dec. 8 at US$491.02.

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