Price to Earnings (P/E)
since 2005
Calculation
Microsoft Corp., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net income1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jul 29, 2026 | 21.68 | = | 390.54 | ÷ | 18.01 | 18.01 | = | 133,749 | ÷ | 7,425,545,491 | |
| Jul 30, 2025 | 37.46 | = | 513.24 | ÷ | 13.70 | 13.70 | = | 101,832 | ÷ | 7,433,166,379 | |
| Jul 30, 2024 | 35.67 | = | 422.92 | ÷ | 11.86 | 11.86 | = | 88,136 | ÷ | 7,433,038,381 | |
| Jul 27, 2023 | 33.96 | = | 330.72 | ÷ | 9.74 | 9.74 | = | 72,361 | ÷ | 7,429,763,722 | |
| Jul 28, 2022 | 28.34 | = | 276.41 | ÷ | 9.75 | 9.75 | = | 72,738 | ÷ | 7,457,891,872 | |
| Jul 29, 2021 | 35.14 | = | 286.50 | ÷ | 8.15 | 8.15 | = | 61,271 | ÷ | 7,514,891,248 | |
| Jul 31, 2020 | 35.04 | = | 205.01 | ÷ | 5.85 | 5.85 | = | 44,281 | ÷ | 7,567,652,935 | |
| Aug 1, 2019 | 26.86 | = | 138.06 | ÷ | 5.14 | 5.14 | = | 39,240 | ÷ | 7,635,409,400 | |
| Aug 3, 2018 | 50.00 | = | 108.04 | ÷ | 2.16 | 2.16 | = | 16,571 | ÷ | 7,668,217,316 | |
| Aug 2, 2017 | 26.25 | = | 72.26 | ÷ | 2.75 | 2.75 | = | 21,204 | ÷ | 7,702,243,979 | |
| Jul 28, 2016 | 26.08 | = | 56.21 | ÷ | 2.16 | 2.16 | = | 16,798 | ÷ | 7,792,515,573 | |
| Jul 31, 2015 | 30.63 | = | 46.70 | ÷ | 1.52 | 1.52 | = | 12,193 | ÷ | 7,997,980,969 | |
| Jul 31, 2014 | 16.11 | = | 43.16 | ÷ | 2.68 | 2.68 | = | 22,074 | ÷ | 8,239,848,789 | |
| Jul 30, 2013 | 12.14 | = | 31.85 | ÷ | 2.62 | 2.62 | = | 21,863 | ÷ | 8,329,956,402 | |
| Jul 26, 2012 | 14.40 | = | 29.16 | ÷ | 2.03 | 2.03 | = | 16,978 | ÷ | 8,383,396,575 | |
| Jul 28, 2011 | 10.03 | = | 27.72 | ÷ | 2.76 | 2.76 | = | 23,150 | ÷ | 8,378,265,782 | |
| Jul 30, 2010 | 11.91 | = | 25.81 | ÷ | 2.17 | 2.17 | = | 18,760 | ÷ | 8,653,567,331 | |
| Jul 30, 2009 | 14.56 | = | 23.81 | ÷ | 1.64 | 1.64 | = | 14,569 | ÷ | 8,910,673,817 | |
| Jul 31, 2008 | 13.28 | = | 25.72 | ÷ | 1.94 | 1.94 | = | 17,681 | ÷ | 9,130,293,074 | |
| Aug 3, 2007 | 74.58 | = | 111.89 | ÷ | 1.50 | 1.50 | = | 14,065 | ÷ | 9,375,492,496 | |
| Aug 25, 2006 | 63.21 | = | 79.88 | ÷ | 1.26 | 1.26 | = | 12,599 | ÷ | 9,969,991,800 | |
| Aug 26, 2005 | 70.27 | = | 80.38 | ÷ | 1.14 | 1.14 | = | 12,254 | ÷ | 10,712,706,028 |
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Microsoft Corp. Annual Report.
The valuation metrics exhibit three distinct phases: an initial period of high multiples, a prolonged era of valuation compression, and a subsequent expansion driven by accelerated earnings growth.
- Valuation Compression (2008–2014)
- A significant correction in the P/E ratio is observed starting in 2008, where the ratio fell sharply from 74.58 to 13.28. This low-valuation regime persisted through 2014, with the ratio fluctuating primarily between 10.03 and 16.11. During this interval, the market applied a more conservative multiple to earnings, despite a general trend of stable or slightly increasing Earnings per Share (EPS).
- Growth Expansion (2015–2024)
- A sustained upward trend in valuation began in 2015, characterized by a shift toward higher multiples. The P/E ratio generally remained above 26, with a notable peak of 50.00 in 2018. This expansion aligns with a sharp acceleration in EPS, which grew from 1.52 in 2015 to 11.86 in 2023, suggesting a market re-rating based on improved growth prospects and increased profitability.
- Recent Price and Multiple Adjustment (2025–2026)
- The most recent data indicates a divergence between earnings performance and share price. Although EPS continued to climb, reaching 18.01 by 2026, the share price decreased to 390.54. This resulted in a contraction of the P/E ratio to 21.68, representing the lowest valuation multiple since 2014.
Overall, the relationship between share price and earnings evolved from high-speculation multiples in the mid-2000s to a period of value-based pricing, followed by a growth-oriented expansion, and concluding with a recent correction in the price multiple.
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Comparison to Competitors
Microsoft Corp., P/E, long-term trends, comparison to competitors
| Microsoft Corp. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jul 29, 2026 | 21.68 | — | — | — | — | — | — | — | — | 29.69 | — | — | 23.88 | — | — | 56.01 |
| Jul 30, 2025 | 37.46 | 19.47 | 17.51 | 41.68 | 72.92 | — | 398.52 | 20.31 | 48.19 | 47.60 | 195.77 | 112.39 | 45.28 | 69.85 | 69.11 | 122.85 |
| Jul 30, 2024 | 35.67 | 31.07 | 31.98 | 68.97 | 67.09 | 892.67 | 235.49 | 39.68 | 58.94 | 37.63 | 632.38 | 42.42 | 71.24 | 146.40 | 33.69 | 50.53 |
| Jul 27, 2023 | 33.96 | 27.81 | 49.64 | 56.56 | 78.64 | — | 884.97 | 22.50 | 64.61 | 38.96 | 246.77 | 170.35 | 879.57 | 90.80 | 70.08 | — |
| Jul 28, 2022 | 28.34 | 22.93 | 33.15 | — | 59.70 | — | — | 71.56 | 57.31 | 26.85 | — | — | 135.68 | 284.29 | 51.76 | 1,957.29 |
| Jul 29, 2021 | 35.14 | 36.58 | 48.90 | 472.35 | 53.88 | — | — | 19.40 | 75.17 | 15.84 | — | — | 48.20 | 487.70 | 73.37 | — |
| Jul 31, 2020 | 35.04 | 28.32 | 41.69 | — | 62.89 | — | — | 19.30 | 49.52 | 16.69 | — | — | 1,204.70 | 978.49 | 55.92 | — |
| Aug 1, 2019 | 26.86 | 24.58 | 57.17 | — | 20.22 | — | — | 13.35 | 48.17 | 16.89 | — | — | 107.70 | 106.89 | 39.55 | — |
| Aug 3, 2018 | 50.00 | 24.10 | 46.11 | — | 46.59 | — | — | 14.25 | 46.88 | 45.90 | — | — | 731.11 | — | 29.60 | — |
| Aug 2, 2017 | 26.25 | 26.18 | 57.41 | — | 55.67 | — | — | 25.07 | 37.26 | 22.49 | — | — | 324.94 | — | 95.81 | — |
| Jul 28, 2016 | 26.08 | 18.07 | 46.80 | — | 40.53 | — | — | 14.29 | 29.60 | 18.53 | — | — | — | — | 33.71 | — |
| Jul 31, 2015 | 30.63 | 22.75 | 70.59 | — | 25.14 | — | — | 9.65 | 63.89 | 17.92 | — | — | — | — | 30.45 | — |
| Jul 31, 2014 | 16.11 | 17.46 | 132.73 | — | 34.03 | — | — | 13.55 | 26.44 | 16.33 | — | — | — | — | 25.00 | — |
| Jul 30, 2013 | 12.14 | 15.20 | 104.21 | — | 26.30 | — | — | 11.58 | 21.73 | 12.78 | — | — | — | — | 24.68 | — |
| Jul 26, 2012 | 14.40 | 17.95 | 22.73 | — | 9.11 | — | — | 13.37 | 22.37 | 13.61 | — | 6,057.94 | — | — | 26.53 | — |
| Jul 28, 2011 | 10.03 | 17.60 | 18.49 | — | 44.80 | — | — | 14.47 | 22.53 | 19.17 | — | — | 251.73 | — | 17.51 | — |
| Jul 30, 2010 | 11.91 | 17.62 | 22.05 | — | 20.39 | — | — | 13.32 | 24.82 | 17.66 | — | — | 118.88 | — | 17.09 | — |
| Jul 30, 2009 | 14.56 | 17.45 | 46.62 | — | — | — | — | 12.24 | 20.01 | 19.25 | — | — | 87.39 | — | 18.86 | — |
| Jul 31, 2008 | 13.28 | 13.74 | 11.84 | — | — | — | — | 9.40 | 20.68 | 19.44 | — | — | 388.13 | — | 13.55 | — |
| Aug 3, 2007 | 74.58 | 24.38 | 27.23 | — | 10.43 | — | — | 15.20 | 21.92 | 23.58 | — | — | 10,271.10 | — | 29.39 | — |
| Aug 25, 2006 | 63.21 | 26.95 | 44.72 | — | 41.15 | — | — | 14.90 | 27.35 | 23.43 | — | — | 151.60 | — | 156.86 | — |
| Aug 26, 2005 | 70.27 | 24.06 | 38.61 | — | 103.88 | — | — | 15.85 | 21.02 | 23.70 | — | — | 207.38 | — | — | — |
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Sector (Software & Services)
Microsoft Corp., P/E, long-term trends, comparison to sector (software & services)
| Microsoft Corp. | Software & Services | |
|---|---|---|
| Jul 29, 2026 | 21.68 | — |
| Jul 30, 2025 | 37.46 | 40.01 |
| Jul 30, 2024 | 35.67 | 42.11 |
| Jul 27, 2023 | 33.96 | 40.33 |
| Jul 28, 2022 | 28.34 | 34.78 |
| Jul 29, 2021 | 35.14 | 38.09 |
| Jul 31, 2020 | 35.04 | 38.69 |
| Aug 1, 2019 | 26.86 | 28.30 |
| Aug 3, 2018 | 50.00 | 43.31 |
| Aug 2, 2017 | 26.25 | 30.27 |
| Jul 28, 2016 | 26.08 | 23.96 |
| Jul 31, 2015 | 30.63 | 23.38 |
| Jul 31, 2014 | 16.11 | 18.36 |
| Jul 30, 2013 | 12.14 | 14.09 |
| Jul 26, 2012 | 14.40 | 14.97 |
| Jul 28, 2011 | 10.03 | 13.91 |
| Jul 30, 2010 | 11.91 | 14.04 |
| Jul 30, 2009 | 14.56 | 15.17 |
| Jul 31, 2008 | 13.28 | 13.87 |
| Aug 3, 2007 | 74.58 | 43.67 |
| Aug 25, 2006 | 63.21 | 39.59 |
| Aug 26, 2005 | 70.27 | 44.69 |
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Industry (Information Technology)
Microsoft Corp., P/E, long-term trends, comparison to industry (information technology)
| Microsoft Corp. | Information Technology | |
|---|---|---|
| Jul 29, 2026 | 21.68 | — |
| Jul 30, 2025 | 37.46 | 40.65 |
| Jul 30, 2024 | 35.67 | 45.35 |
| Jul 27, 2023 | 33.96 | 36.11 |
| Jul 28, 2022 | 28.34 | 26.94 |
| Jul 29, 2021 | 35.14 | 29.77 |
| Jul 31, 2020 | 35.04 | 31.23 |
| Aug 1, 2019 | 26.86 | 23.31 |
| Aug 3, 2018 | 50.00 | 23.18 |
| Aug 2, 2017 | 26.25 | 23.50 |
| Jul 28, 2016 | 26.08 | 19.51 |
| Jul 31, 2015 | 30.63 | 16.54 |
| Jul 31, 2014 | 16.11 | 17.12 |
| Jul 30, 2013 | 12.14 | 14.14 |
| Jul 26, 2012 | 14.40 | 14.37 |
| Jul 28, 2011 | 10.03 | 13.73 |
| Jul 30, 2010 | 11.91 | 14.99 |
| Jul 30, 2009 | 14.56 | 21.45 |
| Jul 31, 2008 | 13.28 | 15.68 |
| Aug 3, 2007 | 74.58 | 36.28 |
| Aug 25, 2006 | 63.21 | 31.95 |
| Aug 26, 2005 | 70.27 | 33.66 |
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).