Market Cap: $2,155 billion
Microsoft could reach $400 per share with a $3 trillion market capitalization, up from its present $2.155 trillion market cap and $286.14 share price at the close on July 22. This would happen if the software company produces excellent free cash flow (FCF) and FCF margins for Q2. Microsoft releases earnings for its fiscal Q4 ending June 30 on July 27.
Last quarter, its revenue rose 19% year-over-year (YoY) and operating income rose 31% to $17 billion. But FCF rose 24% in the past year to $17.09 billion. This represents a huge 41% of its quarterly $41.7 billion in revenue for the March quarter. So we can use this to value MSFT stock.