Microsoft is trading over 3.1 Trillion USD market cap and Apple is trading at 2.6 Trillion USD market cap

Microsoft is trading over 3.1 Trillion USD market cap and Apple is trading at 2.6 Trillion USD market cap.

Microsoft is trading at 38.2 times PE ratio and it is relatively high PE ratio for a large cap stock like Microsoft.

Even the story of Microsoft growth story, ChatGPT witnessing growth are strengths related to Microsoft, a large cap like Microsoft trading at 38 times means, investors should be cautious.

A company like ChatGPT can trade even at 80 times of its EPS because it is a startup and still total user base not formed and so lot of growth potential will be there in startups like ChatGPT and still it is in the growth path.

Getting to Microsoft, it is well established company and large cap company that is currently trading almost at 3.2 Trillion USD. Such a big company trading at 38 times of its EPS is definitely expensive. 

We remember in the recent past we had written article that Microsoft market cap will exceed Apple if global economy slowdown occurs. Reason is Microsoft products and solutions are unavoidable and only consumption can be reduced. 

But getting to Apple, purchasing of new version of iPhone can be postponed by consumers if there is global economic slowdown. This is the reason we had written article in the recent past 4 months that Microsoft will overtake Apple.

Current valuation of Microsoft trading at 38.2 times is bit expensive as per us and so please be cautious.

Trading at high PE level i.e around 38.2 levels being Microsoft a large cap stock, people should be cautious while investing. Even a small negative news will trigger stock prices down.