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Investing legend: Microsoft is ‘stupidly underpriced’

Talking Numbers

Is there value in Microsoft?

Microsoft just snagged a contract with a prominent airline. And, a legendary value investor says the stock is “stupidly underpriced”. So is the tech giant a buy?

While American and United Airlines gave their pilots Apple iPads to replace the 38 lbs. of books each one carries into a cockpit, Delta just announced that it’s going with Microsoft Surface 2 tablets. One of the reasons is that Delta’s training software already runs on Windows.

(Read: U.S. to consider relaxing rules on using electronics in flight)

On the, well, surface of it, Delta’s purchase of 11,000 Surface 2 tablets won’t move the needle all that much when it comes to Microsoft’s revenues. Given that the Surface 2 retails for about $449, this would mean at most a $5 million buy without any special software.

But there’s more to Microsoft’s story than just one contract.

Bill Miller, chairman of Legg Mason Capital Management, said on CNBC’s “Squawk Box” today:

“Microsoft has been a terrible stock for a decade. It started out stupidly overpriced and now it’s stupidly underpriced.”

(Watch: Why Bill Miller loves Apple and Microsoft)

So, is there value in Microsoft? And what do the charts say?

Looking at Microsoft’s fundamentals is CNBC contributor Zachary Karabell, founder and president of RiverTwice Research. On Microsoft’s charts is Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson.

Is Microsoft a buy? Watch the video to see what the fundamentals and technicals have to say about it.

More from Talking Numbers:

Olstein: Make money NOT predicting the market
Hedge funds are bidding up this stock
This stock is up 254% this year. Here’s why you should avoid it

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