Just noticed Microsoft is trading at valuations we haven't seen since the 2023 crash. Down nearly 30% from its peak, which is wild for a company this size and importance. I think this is actually a rare window to accumulate.

Here's my take on where this could be in three years from now. The market's obsessed with AI returns right now, and everyone's getting hammered on valuation. But Microsoft's playing the game differently than most. Instead of building their own generative AI model from scratch, they're positioning Azure as the neutral ground where developers can pick whatever AI model works best for them. Smart move because it means they benefit from the entire AI wave rather than betting everything on one horse.

Azure's the real story here. Last quarter it grew 39% year-over-year, and that's with management still deploying hardware internally instead of selling it externally. The demand for AI workloads is just getting started. Wall Street's expecting Microsoft to grow revenue around 16% next fiscal year, then 15% the year after. Those feel conservative to me, but let's work with them.

If the company hits those numbers and maintains that 15% growth trajectory, earnings per share should be around $23.45 in three years from now. That's assuming they get back to their historical 33x earnings multiple, which seems reasonable given their market position. That math puts the stock at roughly $774 per share. We're at about $390 today, so you're looking at potential doubling in three years from now. Most stocks need seven years to do that.

Yeah, there's the OpenAI wildcard too. Microsoft owns 27% of it, and if that ever goes public at a trillion-plus valuation, that's just extra upside sitting on the balance sheet. But I'm not counting on it.

The risk is if Azure growth actually slows or the AI spending doesn't materialize the way everyone thinks. But given what I'm seeing in the market, I'd rather be wrong being long Microsoft at these prices than short.