Valuations Shift for Big Tech and Select U.S. Stocks

Micron: Rapid Share Price Gains and Mixed Valuation Signals

Micron Technology’s shares have delivered a 244.2% gain over the past year and recently closed at US$362.75, with returns of 4.9% over seven days, 36.4% over 30 days and 15.0% year to date. The stock has attracted heightened investor attention amid its position in high performance memory and storage for artificial intelligence and data centers, and sentiment around semiconductor demand and capacity spending is feeding into expectations for future cash flows and risk.

A Simply Wall St Discounted Cash Flow model, using a two-stage Free Cash Flow to Equity approach, estimates Micron’s intrinsic value at about US$191.79 per share based on recent free cash flow of roughly US$5.8 billion and projected free cash flows including US$20.7 billion in 2026 and US$20.4 billion in 2030. Against the current share price, this view suggests Micron may be 89.1% overvalued. However, on a P/E basis, Micron trades at 34.28x, below both the peer average of 64.49x and the broader semiconductor industry average of 43.37x.

Simply Wall St’s proprietary Fair Ratio for Micron is 52.60x, implying the shares could be undervalued relative to that tailored P/E benchmark. Community Narratives on the same platform illustrate how different assumptions can drive divergent fair value estimates, with one Micron Narrative anchoring around US$200 per share and another closer to US$249, highlighting the range of views on growth, margins and risk.

Microsoft: Pullback, AI Cloud Narrative and Undervaluation Views

Microsoft shares recently closed at US$459.86, after declines of 3.6% over seven days, 5.4% over 30 days and 2.8% year to date, though the stock remains up 8.0% over one year, 94.1% over three years and 108.8% over five years. Recent headlines emphasize Microsoft’s role in large-scale software and cloud infrastructure and as a key player in broader technology themes, which shape investor assumptions for cash flows and risk.

A Simply Wall St DCF analysis, using a two-stage Free Cash Flow to Equity model, values Microsoft at about US$602 per share, implying the stock is roughly 23.6% undervalued versus the recent price. The model draws on last twelve month free cash flow of about US$89.4 billion and extrapolated projections that reach US$369.8 billion by 2035. Microsoft scores 4 out of 6 on the platform’s valuation checks.

On earnings multiples, Microsoft trades at a P/E of 32.58x, near the software industry average of 31.60x and slightly above a peer average of 31.97x. Simply Wall St’s Fair Ratio for Microsoft is 51.16x, suggesting undervaluation on this metric as well. Community Narratives show a wide valuation range: one bull case estimates fair value around US$622.51 per share with forecast revenue growth of about 15.28% a year and a focus on AI and cloud expansion, while a bear case pegs fair value near US$420 with revenue growth of about 0.78% a year and highlights risks around heavy AI and data center spending and pressure in legacy segments.

Separate coverage describes Microsoft as more than halfway through its 2026 fiscal year, with Wall Street projecting full-year revenue around US$327 billion. Prior-year net income was US$101.8 billion, nearly matching its cash position of US$102 billion. The productivity and business processes segment, including Microsoft 365 Commercial and Consumer Cloud and LinkedIn, is its largest contributor, closely followed by the intelligent cloud segment centered on Azure. Analyst consensus compiled by S&P Global in January shows all but two analysts rating the stock as “buy” or “strong buy,” with a consensus price target implying potential upside of over 30%.

Apple and Nvidia Framed as High-Cash “Money Machines”

Apple is characterized as a major profit generator, reporting US$416 billion in revenue and US$112 billion in profits for its fiscal year ending Sept. 27, 2025, alongside cash of US$54.7 billion. iPhone sales account for 50% of total revenue, with associated products and services such as Apple Watch and the App Store further boosting the contribution linked to the iPhone.

Apple’s CEO Tim Cook said on the October earnings call that the company was “incredibly excited” about the strength across products and services and expected the December quarter’s revenue to be the best ever for both the company and the iPhone. Apple is also reportedly developing AI-powered smart glasses that are expected to be unveiled sometime this year, with shipments not anticipated until 2027, according to the article’s description.

Nvidia is presented as another large-scale profit engine, expecting around US$212 billion in revenue for its fiscal year 2026, which ends later this month, with profits likely accounting for more than half of that total. The company holds US$60.6 billion in cash, cash equivalents and marketable securities. Nvidia’s GPUs, initially developed for gaming, are described as the core cash generator and the standard for powering AI applications, with data center revenue comprising nearly 90% of total revenue in the latest quarter. Over the last 12 months, Nvidia’s share price has risen by roughly 35%.

Verisk and Southern: Narratives Focused on Valuation and Capital Plans

Verisk Analytics has seen a 0.7% share price decline over the past day and a roughly 20.3% drop in total return over the past year, despite positive three- and five-year returns. The stock recently traded at US$220.41, with a 30-day return of 1.1%. A leading Simply Wall St Narrative assigns Verisk a fair value of about US$248.56, implying the shares are 11.3% undervalued under assumptions including a 7.46% discount rate and continued investment in data precision and real-time insights.

The Verisk narrative expects that such investments could support competitive pricing capabilities, strengthen revenue and enhance margins through premium analytics services, but it also flags risks from softer 2025 revenue guidance and concerns that heavier AI and AccuLynx spending may not result in stronger returns. Investors are encouraged on the platform to build custom narratives to test alternative assumptions.

In utilities, several brokers including Barclays have recently reiterated their views on Southern Company while updating research assessments, collectively signaling that analysts are reassessing the outlook for this large, capital-intensive regulated utility. The central near-term focus remains on execution of an expanded US$76 billion capital plan, alongside funding and margin pressure as key risks. Southern’s upcoming Q4 2025 earnings release and conference call on 19 February 2026 is highlighted as an event where management is expected to update investors on capital spending, load trends and regulatory proceedings.

One Southern narrative projects revenue of US$31.7 billion and earnings of US$5.8 billion by 2028, implying 3.8% annual revenue growth and about US$1.5 billion in earnings growth from US$4.3 billion today, with a stated 12% upside to the current price in that scenario. Simply Wall St community fair value estimates for Southern range from US$77.85 to US$258.36, underscoring the wide spread of views on how the enlarged capital plan, potential equity issuance and margin pressures could affect future performance.