AT&T will use Microsoft’s Azure cloud service for its computing needs and provide Office 365 software to much of its 268,000 employees. The Microsoft contract from AT&T is estimated to be worth $2 billion.

This deal with AT&T means that Microsoft technology will be deployed alongside AT&T’s coming 5G network.

The deal is a major win for Microsoft, which is fighting to gain market share against Amazon Web Services, the biggest provider of public cloud services.

The main area of risk for taking an entry in Microsoft stock is its valuation. The stock trades at a Price to Earnings ratio of 30.39 and a Forward Price to Earnings ratio of 26.88.

Revenue has been growing by 7.07% on average over the past 5 years but in just the last year, revenue has grown by 23.12% which means revenue growth is speeding up. This is likely why the stock has such high P/E ratios at the moment.

With a positive Twiggs Money Flow and rising large players volume, the stock is overvalued and when another pullback comes like the one in May 2019, anyone chasing up here will be left holding the bag.

Microsoft stock symbolizes what’s wrong with this current market: most everything has good news already priced in and you’re paying out the nose for future good news.

Microsoft stock fails to make it on the GST portfolio due to the fact that the stock is way overvalued.

Microsoft In The News