The Stock Market Is Historically Pricey: Here’s 1 Reason Microsoft Is Still a No-Brainer Buy

Key Points

• Shares of the tech behemoth are trading near their all-time high price.

• Other tech players’ shares are also soaring because of enthusiasm about AI.

• But Microsoft’s diversification on the whole keeps its business a bit more stable.

• 10 stocks we like better than Microsoft ›

The stock market has been on a bull run for close to two years, which is good news for investors. The “we should keep an eye on that” news is that it’s now historically pricey, which leaves it more susceptible to a pullback if investor sentiment quickly shifts (which isn’t far-fetched).

Despite the priciness of the current market, one stock remains a no-brainer buy: Microsoft (NASDAQ: MSFT). The stock is up over 22% year to date through Sept. 26 and flirting with its all-time high, which it reached in early August.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

A good amount of the market’s growth, based on the S&P 500, has come from tech stocks skyrocketing in valuation due to the artificial intelligence (AI) boom. The “Magnificent Seven” stocks, of which Microsoft is a part, now account for over one-third of the S&P 500. That’s not ideal from a diversification perspective.

Microsoft stands out as a no-brainer amid the current environment due to the diversity of its business compared to most other companies, regardless of industry. I like to refer to Microsoft as the tech Swiss Army knife because it touches so many different parts of the tech world. It has enterprise and consumer productivity software (Excel, Word, Teams, etc.); a thriving cloud platform (Azure); hardware (PCs, tablets, accessories); gaming (Xbox); professional networking (LinkedIn); and search/advertising (Bing).

While other tech companies’ valuations may be propped up by the recent AI hype, Microsoft’s diversified business ensures it remains reliable even if/when the AI hype fades, and if one or a couple segments lag, Microsoft has plenty of others that can hold their own weight. This doesn’t mean it can’t experience down periods; however, in the long term, it’s in a great position.

Should you invest $1,000 in Microsoft right now?

Before you buy stock in Microsoft, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $646,567!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,143,710!*

Now, it’s worth noting Stock Advisor’s total average return is 1,072% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 29, 2025

Stefon Walters has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.