Microsoft Corporation (MSFT) Is Overvalued, Well-Known Investor Says

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Microsoft Corporation (MSFT) stock is currently trading at valuations that prominent investor Steve Weiss believes are undeserved. Weiss, the Chief Investment Officer and Managing Partner of Short Hills Capital Partners, expressed his concerns about the tech giant’s growth and valuation on a recent CNBC segment.

According to Weiss, Microsoft has seen a recent uptick in short covering, but many Wall Street banks remain cautious about the company’s prospects. He pointed out that the stock has returned to excessive multiples that were present at the end of last year, indicating potential overvaluation.

Despite his reservations, Weiss disclosed that he still holds MSFT stock in his portfolio. On the same segment, Joe Terranova, Senior Managing Director for Virtus Investment Partners, shared a different perspective on Microsoft’s performance.

Terranova highlighted that Microsoft is among the Mag 7 stocks closest to reaching its all-time high. He noted that out of all the Mag 7 stocks, Microsoft had the most bearish sentiment and weakest positioning at the start of the year.

While acknowledging Microsoft’s potential, Terranova emphasized his belief in the greater promise of AI stocks for delivering higher returns in a shorter timeframe. He referenced an AI stock that has shown significant gains since the beginning of 2025, outperforming popular AI stocks that experienced losses.

For investors seeking AI stocks with promising potential and attractive valuations, Terranova recommended exploring opportunities beyond Microsoft. He directed readers to a report on the “cheapest AI stock,” which trades at less than 5 times its earnings and is poised for substantial gains.

In conclusion, while Microsoft remains a significant player in the tech industry, investors may find more compelling opportunities in the AI sector. By diversifying their portfolios and exploring undervalued AI stocks, investors can potentially maximize their returns and capitalize on emerging trends in the market.

For more insights on the best AI stocks to buy and investment strategies recommended by industry experts, readers are encouraged to check out related articles on Insider Monkey’s platform. Disclosure: None.