Not since the hype in 2021 have tech stocks been this hot. ChatGPT lit a fuse under anything tech-related and any company involved with artificial intelligence (AI). Microsoft (NASDAQ: MSFT), the company that invested billions into ChatGPT's owner, OpenAI, is no exception.

Year to date, Microsoft's shares are up around 40% and the Redmond, Washington-based tech giant is now at a $2.5 trillion valuation and right around its all-time highs. Has the stock become too expensive, or is Microsoft still a good buy right now?

A price-to-earnings (P/E) multiple is a good way to gauge the value you're getting from a stock. You can compare it to similar stocks and even the stock's own history to see how relatively cheap or expensive it may be. Microsoft's stock is trading at 36 times its trailing profits, which is only slightly higher than the tech stock average of 33. But given how hot tech stocks have been of late, that may not be the best comparable right now.

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Source Fool.com