Matthew Waterman
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Matthew Waterman in Brand Power,

Microsoft Will Probably Fall A Bit More Before Rising Again

Microsoft (MSFT) is a bit of a mixed bag. On one hand, they are the leaders in operating sytems on PC as well as software for server operations, as well as a long term winner for dividend growth investors. On the other hand, trees do not grow to the sky, and growth hasn't been spectacular since the company's go-go days in the 90's. 

The market is able to see that, and isn't going to pay a premium for a company without the growth to back it up. Friday's 7%+ drop refects that sentiment. Even today the stock is still trading above 36 times trailing earnings. Expect the price to move closer to 30 times earnings, possibly less, which would be about $42/share before it will be more stable.