Not as undervalued as AAPL, but definitely undervalued.
Here’s the Trefis view. They see it worth $42 versus current $26-27.
Microsoft depends on Office’s dominance
While Microsoft’s Windows OS is the product that garners the most attention, Microsoft’s biggest revenue driver is Microsoft Office productivity suite. This segment generated approximately $23 billion in revenue in 2011, and we expect this to grow to $26 billion by 2016. The division has the highest margins for Microsoft at around 60%, which is primarily due to its dominant 95% market share in the productivity suite market.