Microsoft Is One of the Most Mispriced AI Stocks Today. Here’s Why It Is About to Surge Soon.

Microsoft (MSFT) has had a rough time so far in 2026. Down 20% year-to-date (YTD), MSFT stock has been on the receiving end of the “AI replacing software” debate. Despite being the second-largest cloud services provider behind Amazon (AMZN) and investing heavily in AI, the company just hasn't gotten its fair share of recognition. While this apparent disparity in treatment has left many investors stumped, others have been slowly accumulating shares — and they may soon be rewarded for their patience.

Gil Luria, head of tech research at D.A. Davidson, recently called out the extreme valuation gaps among tech companies. Luria pointed out that stocks like Micron (MU) and Nvidia (NVDA) — trading at forward price-to-earnings (P/E) multiples of 13 times and 22 times, respectively — are priced as if the cycle has peaked and their earnings are set to normalize. Yet CPU stocks, which are one reason why memory stocks keep going up, are trading at forward P/E ratios many times higher.