Microsoft, Nvidia became cheap enough for this value investor
One value investor who envied the yearslong rise of artificial intelligence darlings Microsoft and Nvidia has finally found their prices compelling enough to snap up earlier this year. He also said he will be buying any dips. Chris Grisanti, chief market strategist at MAI Capital Management, oversees the MAI Focused Equity Strategy, which has $3 billion in assets under management. This strategy, which is for separately managed accounts, is concentrated in just 21 names that are typical of a value fund. He chooses stocks that are trading below market price-earnings multiples, usually 1+ standard deviation below its P/E ratio, with solid balance sheets and dividends. This means typical value names like Verizon , UPS and Kimberly-Clark that are resilient in a downturn, and generate big dividends, but generally don’t post huge earnings growth. But in the first quarter of 2026, Grisanti said that he bought into two notable beneficiaries of the AI trade, Microsoft and Nvidia, after their weak start to the year. Nvidia is higher by more than 13% year to date, but much of those gains come from its 20% rally in April. Microsoft is down more than 12% this year, and the stock remains in a bear market. NVDA YTD mountain Nvidia shares in 2026 “As a value investor, I would love to pay a market multiple for these companies, but I never get the chance,” Grisanti said. “So, all of the sudden, because they’re temporarily out of favor, and because folks are having AI doubts about whether this big boom can possibly continue, I think there’s a unique opportunity for value investors to own stock that they were always kind of jealous they couldn’t own because they were too expensive.” Grisanti said he’s never owned Nvidia, and that he hasn’t owned Microsoft in 10 years. Nvidia is now his fourth-largest holding, while Microsoft is his third. He said he expects the two investments could help the fund keep pace with the market the next time it rips higher on AI, such as it had in April. Microsoft Microsoft has been a troubled stock for much of this year, making it a key stock to watch among the megacaps that report Wednesday after the close. The enterprise software giant has floundered as investors demand it justify its high spend on Nvidia’s GPUs with stronger revenue growth. The stock remains below its 200-day moving average, which suggests the long-term trend is broken. However, Microsoft’s dominance in enterprise software and its cash pile of roughly $89.5 billion as of the December 2025 quarter suggests the tech giant could gain the edge it needs to win in the AI race, one that shows no signs of slowing. The stock is also a dividend payer, with a modest current yield of 0.9%. MSFT YTD mountain Microsoft in 2026 Grisanti said that he likes the stock given that it’s now trading at 19.6-times next year’s earnings, or almost two standard deviations below its average P/E of around 25-times over the last six years. A rerating back to normal levels would mean 30% upside. However, he expects higher earnings a few years from now could mean closer to a 50% total return from the stock. “This isn’t asking for record valuations,” Grisanti said. “What I’m saying is, if we get back to normal valuation, where I’m going to make a huge return.” Nvidia Nvidia, which recently closed at a record and pushed its market cap over $5 trillion, was a buying opportunity for the value investor in the first quarter when it dropped more than 6%, as the onset of the Iran war and fears around high valuations deterred investors from the stock. That has made it attractive enough for Grisanti, who said that the stock is now trading at 18 times next year’s earnings. He pointed out that that is roughly the market multiple and low relative to the chipmaker’s own history. If the chipmaker just makes it back to its historical norm of 30-times, then a simple rerating could mean 60% upside in shares. To be sure, Grisanti said he would sell is valuations become too rich, or if the thesis around AI capex spending breaks meaningfully. Until then, however, he said he would buy any dips in the stocks. Microsoft reports Wednesday after the close. Nvidia is set to report results on May 20. “This isn’t rocket science. I’m almost ashamed to recommend such big blue-chip stocks,” Grisanti said. “But the story here isn’t so much that I like Microsoft, Nvidia. It’s that I’m a value guy, and they really fit nicely into my criteria for the first time in 10 years.”
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