Microsoft (MSFT)
Down around 19% this past 6 months, we have rated Microsoft stock Buy because we think it’s the deal of the century right now. MSFT stock has a reasonable valuation at a 26 PE, particularly given its high earnings growth forecasts and high historical PE around 31. They’ve also beat all 4 of their last earnings calls and analysts are rating it a Strong Buy with an average one year forecast of +32%. Its high exposure to AI does introduce risk but the reward case is certainly there with plenty of integration options (cloud services, co-pilot, etc.) to cushion any potential downward ROI revisions should the technology not live up to expectations. We have put them as low risk, medium reward and have rated it a Strong Buy with a +17% one year forecast.
Meta (META)
Down 13% in the past month, Meta stock at a PE of 21 presents a pretty good buy case given it’s strong revenue growth forecasts and recent historical average of a 23 PE. Meta has beat their last 3 earnings and analysts are rating Meta stock a Strong Buy on average with a 30% one-year upside. This stock is a great choice for investors that want exposure to the potential of creative AI while being backed by proven ad-based revenue structures. We have put Meta as medium risk, medium reward stock and rate it as a Strong Buy with a +22% one year forecast.
