The U.S. stock market is under pressure these days because of economic concerns, new tariffs, and growing trade tensions. Microsoft (NASDAQ:MSFT) has also been affected. Its stock has dropped from around $450 in January to about $370 now. Still, compared to many other tech companies, Microsoft has held up better and stayed more stable.

One reason is that Microsoft doesn’t depend much on China sales, as China makes up just a small single-digit percentage. Also, Microsoft mainly earns from software and cloud services, which aren’t directly affected by global trade problems.

So, is $370 a good level to buy MSFT? We believe yes. Our positive view is based on how Microsoft is performing, both financially and operationally. We looked at things like its growth, profits, balance sheet, and how it performs in tough markets and Microsoft scored very strong in almost every area.

If you’re looking for less risk, there’s also the Trefis High-Quality portfolio. This collection of top companies has given over 91% return since it started even more than the S&P 500 and with lower ups and downs than individual stocks.

Is Microsoft Overpriced Compared To The Market?

Yes, when we look at valuation, Microsoft seems expensive. Its P/S ratio is 11.0 while the S&P 500 average is 2.8. Its P/E ratio is 30 compared to the market’s 22. But valuation alone doesn’t tell the full story. Let’s see how Microsoft has actually performed.

How Fast Has Microsoft Grown?

Microsoft’s revenue growth is strong. Over the last 3 years, its average revenue growth was 12.3% per year. The S&P 500 grew just 6.2% in that time. In the previous 12 months, Microsoft’s revenue went from $228 Bil to $262 Bil, a rise of 15.0%, while the S&P 500’s revenue only grew 5.3%. In the latest quarter, Microsoft made $70 Bil, up from $62 Bil a year ago. That’s 12.3% growth, versus 4.9% for the S&P 500.

How Much Profit Does Microsoft Make?

Microsoft is one of the most profitable companies in the world. It made $118 Bil in operating income in the last four quarters, with an operating margin of 45.0%. Compare that to the S&P 500’s average of 13.1%.

How Strong Is Microsoft’s Financial Position?

Microsoft’s balance sheet is very healthy. It has a total debt of $62 Bil, while its market value is $2.8 Tril (as of 4/16/2025). This gives a low debt-to-equity ratio of 2.2% (S&P 500 average is 21.5%). It also holds “$72 Bil” in cash, out of $534 Bil total assets. That’s a solid cash-to-assets ratio of 13.4% (S&P 500 average is 15.0%).

Can Microsoft Handle a Market Crash?

Microsoft has proven to be more stable than the market during past crises.

During the Inflation Shock (2022):

Stock fell 36.3% vs. 25.4% drop in S&P 500. Recovered fully by 14 June 2023. Hit a new high of $467.56 on 7 July 2024 and now trades at around $370.

During the Covid Crash (2020):

Stock fell 28.2% vs. 33.9% drop in S&P 500. Recovered fully by 9 June 2020.

During the Financial Crisis (2008):

The stock fell 59.1% compared to a 56.8% drop in the S&P 500. It took longer to recover, reaching its previous high by 6 November 2013.

Should You Invest in Microsoft at $370?

Overall, Microsoft is strong in growth, profitability, and financial safety. It is neutral when it comes to handling downturns. In total, it gets a “Very Strong” score. Yes, its valuation looks high. But its current P/E of 30x is actually lower than its 3-year average of 33x. Plus, its cloud services continue to grow at a good pace. For long-term investors those thinking 3 to 5 years ahead Microsoft at $370 looks like a solid opportunity. There may be short-term market noise, but MSFT has the strength to ride it out and grow your wealth. And if you want a smoother ride, Trefis High Quality Portfolio gives another option with strong, steady returns and less risk.