If you look forward for five years, MSFT is not expensive at all with its current price. When you look at the stock, you are thinking about the position of the company's products in the market, its competitors, it consistency of growh, it is risk factors, ....etc. PE is not the only thing to be looked at.
If you look at INTEL, the current PE is not high, and it is attractive, and the current market share of its product is great, 85%.However, if you look at its competitors,
and the current market conditions of its price, the future for INTEL is not really
that bright as it used to be. The competition from AMD, NSM you can never get rid of, the continuous price pressure on INTEL's product will be endless for the years
to come. At the high end, CPQ's ALPHA will be a potential competitor for Mercede.
So, what will INTEL be in five years even though its current PE is attractive ?
While MSFT do not have all those problems which INTEL had , and the more PCs
sold to the market , the more softwares MSFT will sell, and the price will always
be the same no matter the software is sold for the application of high end PCs
or sub $1000 PCs. The risk factor for this stock and this company is very low . |
