Jim Cramer - Mad Money Microsoft Corp MSFT-Q BUY Jul 30, 2025

Historically trades at 25x PE, but is now 37x, not cheap.

Is doing incredibly well, being the software and cloud services and gaming plays. Also, it has embraced AI strongly such as savings in call centres while increasing customer satisfaction.

He trimmed a bit yesterday. 12-month price target of $514, so it's pretty close. He had a 7.5-8% weighting and brought it down. You can also write some short-dated (1 week, perhaps 2) calls. Doesn't see any catalyst until earnings come out.

Giant cashflow generator. Great dividend grower, though dividend's not big. Making new highs. Winner in cloud, lots of opportunity with Copilot. Great business platforms generate fees. He does have a significant underweight in tech, only about 7%. Expensive, but proved it can execute. Large-cap growth is one of the strongest areas of the market.

Likes dominance in its categories.

It reports Wednesday. Wait until the CEO speak before making a move either way.

Long term, definitely a good investment. Good company, has continued to grow, adapted through all markets. Trades ~41x PE, expensive. If you've owned for a while and done well, you may want to diversify away from it; but over the last 30 years, this has been a bad idea.