In other words, Microsoft hasn't actually posted earnings growth since Nadella became CEO -- indeed, analysts expect Microsoft to post EPS of $2.42 for the fiscal year ending this month, down from $2.63 a year ago. Microsoft's forward P/E ratio hasn't risen quite as much as its stock price. But the forward P/E ratio is a function of analysts' earnings estimates for the next fiscal year. Optimism about Microsoft's future prospects thus may be inflating the forward earnings estimates, driving the forward P/E ratio down.