value framework: greenwald epvg analysis

Applying Bruce Greenwald's Earnings Power Value framework: Microsoft's EPV (assuming no growth) is approximately $220. The market prices $175 of growth value on top — requiring 16%+ perpetual growth to justify. At historical fade rates for mature tech, this growth value is approximately 3x too high.

asset value

~$51/sh

tangible book + ip adjustment

epv (no growth)

~$220/sh

sustainable earnings capitalized at wacc

growth value

~$175/sh

market-implied

growth required

16%+

to justify growth value in perpetuity

Greenwald framework verdict: Microsoft's stock price of $395 = $220 EPV + $175 growth premium. The growth premium requires 16%+ perpetual growth — a rate only 3 companies in the S&P 500 have sustained for more than a decade. The base rate for mega-cap tech growth decay is 3–5pp per year after reaching $200B+ revenue. Microsoft is at $281.7B. The math does not support the premium.

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