Microsoft (MSFT) Expands NFL AI Partnership: What Does It Mean for the Company’s Valuation?

Microsoft (MSFT) just announced a major extension of its partnership with the NFL, rolling out next-generation AI tools like Copilot and Azure AI across the league’s teams, operations, and even fan experiences. This deal is more than just a headline grabber; it puts Microsoft’s AI innovations at the center of one of the world’s biggest sports stages, reaching coaches, players, analysts, and millions of fans. For investors evaluating where Microsoft’s AI ambitions are making an impact in the real world, this is a meaningful moment that turns lofty tech promises into something you can actually see on game day.

This news comes at a time when Microsoft has been steadily adding to its momentum, both through notable partnerships and solid financial performance. The stock has gained 23% over the past year, reinforcing its place among tech’s heavyweights, and recent quarterly numbers showed double-digit growth in both revenue and net income. Even as some rivals have seen momentum cool, Microsoft continues layering AI across its business lines, from enterprise solutions to strategic alliances with household names like the NFL. That keeps investors tuned in to what comes next as management works to translate AI leadership into continued growth.

But with shares sitting near their highs and AI optimism running hot, is Microsoft trading at a level that offers upside from here, or are these future gains already priced into the stock?

Most Popular Narrative: 19.9% Overvalued

According to the narrative from Unike, Microsoft’s current valuation is above its estimated fair value, signaling that expectations for future growth are running high.

Where will Microsoft be in 5 years? Microsoft is expected to be a dominant AI and cloud leader, with deeper AI integration across Office, Azure, and enterprise software. Gaming will be a bigger growth driver, and cybersecurity will be a strong segment.

What is fueling this aggressive price target? There is one big theory shaping these numbers: an ambitious five-year roadmap that depends on rapid expansion in AI, cloud, and gaming. Want to know the core assumptions that send this fair value higher than most? The narrative hints at bold profitability forecasts and a future earnings multiple commonly found among only the market’s most visionary tech giants.

Result: Fair Value of $423.14 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory scrutiny and intensifying AI competition could become catalysts that challenge Microsoft's current growth narrative in the years ahead.

Find out about the key risks to this Microsoft narrative.

Another View: SWS DCF Model Offers a Different Angle

Looking at Microsoft's value from our DCF model, the approach estimates a fair value based on future cash flows rather than market optimism or recent results. Interestingly, this view suggests Microsoft is very close to fair value right now. With two methods painting diverging pictures, the question remains: which scenario will play out?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Microsoft for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Microsoft Narrative

If you see things differently or want to shape your own outlook, you can dive into the numbers and craft your own perspective in just a few minutes. So why not do it your way?

A great starting point for your Microsoft research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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