Eastern Bank lowered its stake in Microsoft Corporation (NASDAQ:MSFT – Free Report) by 5.2% in the 2nd quarter, according to its most recent filing with the SEC. The fund owned 594,556 shares of the software giant’s stock after selling 32,366 shares during the period. Microsoft accounts for approximately 3.4% of Eastern Bank’s holdings, making the stock its 4th biggest holding. Eastern Bank’s holdings in Microsoft were worth $221,781,000 at the end of the most recent reporting period.
A number of other institutional investors have also modified their holdings of MSFT. Vanguard Group Inc. lifted its holdings in Microsoft by 2.3% during the 4th quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after buying an additional 15,955,898 shares during the last quarter. State Street Corp increased its holdings in shares of Microsoft by 2.1% in the 4th quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock valued at $148,060,557,000 after acquiring an additional 6,388,930 shares during the last quarter. Geode Capital Management LLC increased its holdings in shares of Microsoft by 1.1% in the 4th quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock valued at $88,056,019,000 after acquiring an additional 1,911,142 shares during the last quarter. Morgan Stanley raised its position in shares of Microsoft by 0.8% during the 4th quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock valued at $58,624,690,000 after acquiring an additional 980,439 shares in the last quarter. Finally, Norges Bank acquired a new stake in shares of Microsoft during the 4th quarter valued at approximately $50,664,631,000. Institutional investors and hedge funds own 71.13% of the company’s stock.
Analyst Upgrades and Downgrades MSFT has been the subject of a number of research reports. Wolfe Research reaffirmed an “outperform” rating and issued a $550.00 price objective on shares of Microsoft in a report on Thursday, July 30th. Truist Financial reissued a “buy” rating and set a $575.00 target price on shares of Microsoft in a report on Wednesday, July 22nd. Sanford C. Bernstein set a $660.00 price target on shares of Microsoft in a research report on Monday, August 10th. New Street Research decreased their price target on shares of Microsoft from $675.00 to $600.00 and set a “buy” rating for the company in a report on Thursday, April 30th. Finally, Jefferies Financial Group reaffirmed a “buy” rating on shares of Microsoft in a research report on Monday, May 4th. Forty-two investment analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus target price of $560.27.
Read Our Latest Analysis on Microsoft Insider Buying and Selling at Microsoft In related news, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction on Monday, June 1st. The stock was sold at an average price of $460.99, for a total value of $7,145,345.00. Following the transaction, the chief executive officer directly owned 110,477 shares in the company, valued at $50,928,792.23. The trade was a 12.30% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the completion of the transaction, the executive vice president directly owned 42,677 shares in the company, valued at $21,188,276.96. This represents a 10.13% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 37,310 shares of company stock worth $17,256,219 in the last ninety days. 0.03% of the stock is owned by corporate insiders.
Microsoft Stock Up 0.3% MSFT opened at $481.63 on Wednesday. Microsoft Corporation has a 12 month low of $349.20 and a 12 month high of $553.72. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The stock has a market cap of $3.58 trillion, a P/E ratio of 26.82, a P/E/G ratio of 1.59 and a beta of 1.10. The stock’s 50 day moving average price is $414.21 and its 200 day moving average price is $408.06.
Microsoft (NASDAQ:MSFT – Get Free Report) last posted its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, topping the consensus estimate of $4.24 by $0.50. The business had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The company’s quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter in the prior year, the company posted $3.65 earnings per share. As a group, research analysts predict that Microsoft Corporation will post 19.59 earnings per share for the current year.
Microsoft Dividend Announcement The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be given a $0.91 dividend. The ex-dividend date is Thursday, August 20th. This represents a $3.64 annualized dividend and a yield of 0.8%. Microsoft’s payout ratio is 20.27%.
Key Microsoft News Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Azure and Copilot momentum remain the primary catalysts. Azure reportedly surpassed $100 billion in annual revenue, while Microsoft 365 Copilot exceeded 30 million paid seats. Those milestones reinforce the view that Microsoft is beginning to monetize its AI investments at scale. Price Prediction: One Number Could Decide How High Microsoft Goes in 2027 Positive Sentiment: Strong quarterly results continue to support the bull case. Microsoft’s latest report showed earnings per share of $4.74 versus a $4.24 consensus estimate and revenue of $90.01 billion, up 17.7% year over year. Cloud computing and AI helped drive roughly 30% profit growth. These Telltale Signs Cue Microsoft Investors Despite Earnings Surge Positive Sentiment: Enterprise adoption and partnerships are broadening demand. Swiss companies are increasing their use of Microsoft’s AI and cloud products, with governance and data sovereignty controls supporting adoption. S&P Global also expanded its integration of AI-ready data into Microsoft 365 Copilot workflows. Swiss Enterprises Prioritize Microsoft AI Governance Positive Sentiment: Analyst and institutional sentiment remains constructive. William Blair reaffirmed a Buy rating, citing early AI monetization, while Altarock Partners increased its Microsoft position. Microsoft Buy Rating Reaffirmed About Microsoft (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Featured Articles Five stocks we like better than Microsoft The AI Boom Is Turning This Cable Maker Into a Stock to Watch A Star Investor Just Trimmed Amazon—Here’s What It means Wendy’s Deal Buzz May Give Fast-Food Investors a New Reason to Look Home Depot Analysts See a Path to $375 and Beyond Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT – Free Report).
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Confluence Investment Management LLC reduced its position in Microsoft Corporation (NASDAQ:MSFT – Free Report) by 3.8% in the 2nd quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor owned 142,894 shares of the software giant’s stock after selling 5,717 shares during the period. Confluence Investment Management LLC’s holdings in Microsoft were worth $53,302,000 as of its most recent SEC filing.
Other hedge funds and other institutional investors have also recently bought and sold shares of the company. Vanguard Group Inc. raised its position in shares of Microsoft by 2.3% during the 4th quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after purchasing an additional 15,955,898 shares during the last quarter. State Street Corp grew its holdings in Microsoft by 2.1% during the 4th quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock valued at $148,060,557,000 after buying an additional 6,388,930 shares during the last quarter. Geode Capital Management LLC increased its position in Microsoft by 1.1% during the fourth quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock worth $88,056,019,000 after buying an additional 1,911,142 shares in the last quarter. Morgan Stanley increased its position in Microsoft by 0.8% during the fourth quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock worth $58,624,690,000 after buying an additional 980,439 shares in the last quarter. Finally, Norges Bank acquired a new position in shares of Microsoft in the fourth quarter worth $50,664,631,000. 71.13% of the stock is owned by institutional investors and hedge funds.
Trending Headlines about Microsoft Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Azure and Copilot momentum remain the primary catalysts. Azure reportedly surpassed $100 billion in annual revenue, while Microsoft 365 Copilot exceeded 30 million paid seats. Those milestones reinforce the view that Microsoft is beginning to monetize its AI investments at scale. Price Prediction: One Number Could Decide How High Microsoft Goes in 2027 Positive Sentiment: Strong quarterly results continue to support the bull case. Microsoft’s latest report showed earnings per share of $4.74 versus a $4.24 consensus estimate and revenue of $90.01 billion, up 17.7% year over year. Cloud computing and AI helped drive roughly 30% profit growth. These Telltale Signs Cue Microsoft Investors Despite Earnings Surge Positive Sentiment: Enterprise adoption and partnerships are broadening demand. Swiss companies are increasing their use of Microsoft’s AI and cloud products, with governance and data sovereignty controls supporting adoption. S&P Global also expanded its integration of AI-ready data into Microsoft 365 Copilot workflows. Swiss Enterprises Prioritize Microsoft AI Governance Positive Sentiment: Analyst and institutional sentiment remains constructive. William Blair reaffirmed a Buy rating, citing early AI monetization, while Altarock Partners increased its Microsoft position. Microsoft Buy Rating Reaffirmed Wall Street Analyst Weigh In A number of research analysts have issued reports on the stock. Argus reduced their target price on shares of Microsoft from $620.00 to $510.00 and set a “buy” rating on the stock in a report on Friday, July 10th. Arete Research lifted their price target on shares of Microsoft from $730.00 to $870.00 and gave the stock a “buy” rating in a report on Tuesday, May 5th. Wedbush reissued an “outperform” rating and issued a $575.00 price objective on shares of Microsoft in a research report on Wednesday, May 13th. Wolfe Research reissued an “outperform” rating and set a $550.00 price objective on shares of Microsoft in a research note on Thursday, July 30th. Finally, DA Davidson restated a “buy” rating and set a $550.00 target price on shares of Microsoft in a research report on Thursday, July 30th. Forty-two analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $560.27. Get Our Latest Research Report on Microsoft
Microsoft Trading Up 0.3% Shares of MSFT stock opened at $481.63 on Wednesday. The stock has a market cap of $3.58 trillion, a price-to-earnings ratio of 26.82, a price-to-earnings-growth ratio of 1.59 and a beta of 1.10. The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. Microsoft Corporation has a fifty-two week low of $349.20 and a fifty-two week high of $553.72. The firm’s 50 day moving average price is $414.21 and its two-hundred day moving average price is $408.06.
Microsoft (NASDAQ:MSFT – Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.24 by $0.50. The firm had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The firm’s quarterly revenue was up 17.7% compared to the same quarter last year. During the same period in the prior year, the firm earned $3.65 EPS. On average, analysts anticipate that Microsoft Corporation will post 19.59 EPS for the current year.
Microsoft Dividend Announcement The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be given a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.8%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio is presently 20.27%.
Insider Activity at Microsoft In other Microsoft news, CEO Judson Althoff sold 15,500 shares of the stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the transaction, the chief executive officer owned 110,477 shares of the company’s stock, valued at $50,928,792.23. This trade represents a 12.30% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, EVP Takeshi Numoto sold 4,810 shares of the firm’s stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the transaction, the executive vice president owned 42,677 shares in the company, valued at $21,188,276.96. This trade represents a 10.13% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 37,310 shares of company stock valued at $17,256,219. Company insiders own 0.03% of the company’s stock.
Microsoft Company Profile (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Featured Articles Five stocks we like better than Microsoft The AI Boom Is Turning This Cable Maker Into a Stock to Watch A Star Investor Just Trimmed Amazon—Here’s What It means Wendy’s Deal Buzz May Give Fast-Food Investors a New Reason to Look Home Depot Analysts See a Path to $375 and Beyond
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CX Institutional trimmed its stake in Microsoft Corporation (NASDAQ:MSFT – Free Report) by 2.3% during the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund owned 118,731 shares of the software giant’s stock after selling 2,831 shares during the period. Microsoft makes up approximately 1.3% of CX Institutional’s portfolio, making the stock its 16th biggest holding. CX Institutional’s holdings in Microsoft were worth $44,289,000 as of its most recent SEC filing.
A number of other institutional investors and hedge funds have also bought and sold shares of the stock. Longfellow Investment Management Co. LLC lifted its holdings in shares of Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after acquiring an additional 20 shares during the last quarter. Bernzott Capital Advisors bought a new position in Microsoft in the fourth quarter valued at $34,000. Timmons Wealth Management LLC purchased a new stake in Microsoft during the fourth quarter valued at about $36,000. Fairway Wealth LLC raised its position in Microsoft by 287.0% during the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after purchasing an additional 66 shares in the last quarter. Finally, LSV Asset Management bought a new stake in Microsoft during the fourth quarter worth about $44,000. 71.13% of the stock is owned by hedge funds and other institutional investors.
Microsoft Trading Up 0.3% NASDAQ MSFT opened at $481.63 on Wednesday. Microsoft Corporation has a 1-year low of $349.20 and a 1-year high of $553.72. The company has a current ratio of 1.23, a quick ratio of 1.22 and a debt-to-equity ratio of 0.07. The stock has a 50-day moving average of $414.21 and a 200-day moving average of $408.06. The firm has a market cap of $3.58 trillion, a PE ratio of 26.82, a price-to-earnings-growth ratio of 1.59 and a beta of 1.10.
Microsoft (NASDAQ:MSFT – Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.24 by $0.50. The business had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.Microsoft’s revenue for the quarter was up 17.7% compared to the same quarter last year. During the same period last year, the company earned $3.65 EPS. As a group, sell-side analysts forecast that Microsoft Corporation will post 19.59 EPS for the current year. Microsoft Announces Dividend The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.8%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio is 20.27%.
Microsoft News Roundup Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Azure and Copilot momentum remain the primary catalysts. Azure reportedly surpassed $100 billion in annual revenue, while Microsoft 365 Copilot exceeded 30 million paid seats. Those milestones reinforce the view that Microsoft is beginning to monetize its AI investments at scale. Price Prediction: One Number Could Decide How High Microsoft Goes in 2027 Positive Sentiment: Strong quarterly results continue to support the bull case. Microsoft’s latest report showed earnings per share of $4.74 versus a $4.24 consensus estimate and revenue of $90.01 billion, up 17.7% year over year. Cloud computing and AI helped drive roughly 30% profit growth. These Telltale Signs Cue Microsoft Investors Despite Earnings Surge Positive Sentiment: Enterprise adoption and partnerships are broadening demand. Swiss companies are increasing their use of Microsoft’s AI and cloud products, with governance and data sovereignty controls supporting adoption. S&P Global also expanded its integration of AI-ready data into Microsoft 365 Copilot workflows. Swiss Enterprises Prioritize Microsoft AI Governance Positive Sentiment: Analyst and institutional sentiment remains constructive. William Blair reaffirmed a Buy rating, citing early AI monetization, while Altarock Partners increased its Microsoft position. Microsoft Buy Rating Reaffirmed Wall Street Analysts Forecast Growth A number of equities analysts have recently issued reports on MSFT shares. Citizens Jmp reiterated a “market outperform” rating and issued a $550.00 price objective on shares of Microsoft in a report on Tuesday, July 28th. DZ Bank reissued a “buy” rating on shares of Microsoft in a report on Thursday, April 30th. HSBC dropped their target price on Microsoft from $593.00 to $571.00 in a research report on Thursday, April 30th. New Street Research cut their target price on Microsoft from $675.00 to $600.00 and set a “buy” rating for the company in a research note on Thursday, April 30th. Finally, Jefferies Financial Group reiterated a “buy” rating on shares of Microsoft in a research report on Monday, May 4th. Forty-two equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $560.27.
View Our Latest Research Report on MSFT
Insider Activity at Microsoft In related news, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total value of $2,388,068.80. Following the transaction, the executive vice president directly owned 42,677 shares of the company’s stock, valued at $21,188,276.96. The trade was a 10.13% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, CEO Judson Althoff sold 15,500 shares of the company’s stock in a transaction on Monday, June 1st. The shares were sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the sale, the chief executive officer owned 110,477 shares of the company’s stock, valued at $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 37,310 shares of company stock worth $17,256,219 in the last 90 days. Company insiders own 0.03% of the company’s stock.
About Microsoft (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Featured Articles Five stocks we like better than Microsoft The AI Boom Is Turning This Cable Maker Into a Stock to Watch A Star Investor Just Trimmed Amazon—Here’s What It means Wendy’s Deal Buzz May Give Fast-Food Investors a New Reason to Look Home Depot Analysts See a Path to $375 and Beyond Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT – Free Report).
Receive News & Ratings for Microsoft Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Microsoft and related companies with MarketBeat.com's FREE daily email newsletter.
First Financial Bank Trust Division increased its holdings in Microsoft Corporation (NASDAQ:MSFT – Free Report) by 2.7% in the 2nd quarter, according to its most recent filing with the SEC. The institutional investor owned 70,664 shares of the software giant’s stock after buying an additional 1,876 shares during the quarter. Microsoft comprises approximately 1.9% of First Financial Bank Trust Division’s portfolio, making the stock its 15th biggest position. First Financial Bank Trust Division’s holdings in Microsoft were worth $26,359,000 as of its most recent SEC filing.
Other hedge funds have also bought and sold shares of the company. Vanguard Group Inc. boosted its holdings in Microsoft by 2.3% in the fourth quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after purchasing an additional 15,955,898 shares during the last quarter. State Street Corp raised its stake in Microsoft by 2.1% during the 4th quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock valued at $148,060,557,000 after buying an additional 6,388,930 shares during the last quarter. Geode Capital Management LLC raised its stake in Microsoft by 1.1% during the 4th quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock valued at $88,056,019,000 after buying an additional 1,911,142 shares during the last quarter. Morgan Stanley lifted its holdings in shares of Microsoft by 0.8% during the 4th quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock valued at $58,624,690,000 after buying an additional 980,439 shares during the period. Finally, Norges Bank purchased a new position in shares of Microsoft in the 4th quarter worth $50,664,631,000. Hedge funds and other institutional investors own 71.13% of the company’s stock.
Insider Buying and Selling In other Microsoft news, CEO Judson Althoff sold 10,000 shares of the firm’s stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the sale, the chief executive officer owned 100,447 shares in the company, valued at approximately $49,007,086.83. This trade represents a 9.05% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the transaction, the executive vice president directly owned 42,677 shares in the company, valued at $21,188,276.96. This represents a 10.13% decrease in their position. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 37,310 shares of company stock worth $17,256,219. 0.03% of the stock is owned by company insiders.
Microsoft Price Performance NASDAQ MSFT opened at $481.63 on Wednesday. The business’s fifty day moving average is $414.21 and its 200 day moving average is $408.06. Microsoft Corporation has a fifty-two week low of $349.20 and a fifty-two week high of $553.72. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The company has a market capitalization of $3.58 trillion, a PE ratio of 26.82, a price-to-earnings-growth ratio of 1.59 and a beta of 1.10. Microsoft (NASDAQ:MSFT – Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The business had revenue of $90.01 billion during the quarter, compared to analysts’ expectations of $87.62 billion. During the same quarter in the prior year, the business posted $3.65 earnings per share. The business’s quarterly revenue was up 17.7% on a year-over-year basis. Sell-side analysts predict that Microsoft Corporation will post 19.59 earnings per share for the current year.
Microsoft Dividend Announcement The company also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be issued a $0.91 dividend. This represents a $3.64 annualized dividend and a yield of 0.8%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio is currently 20.27%.
Analyst Upgrades and Downgrades Several analysts recently commented on the company. Wolfe Research reaffirmed an “outperform” rating and issued a $550.00 price objective on shares of Microsoft in a report on Thursday, July 30th. New Street Research dropped their target price on Microsoft from $675.00 to $600.00 and set a “buy” rating on the stock in a research report on Thursday, April 30th. Jefferies Financial Group restated a “buy” rating on shares of Microsoft in a research note on Monday, May 4th. Tigress Financial upped their price target on shares of Microsoft from $680.00 to $690.00 and gave the company a “buy” rating in a research report on Wednesday, August 5th. Finally, Sanford C. Bernstein set a $660.00 price target on shares of Microsoft in a research report on Monday, August 10th. Forty-two research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $560.27.
Check Out Our Latest Report on Microsoft
Key Headlines Impacting Microsoft Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Azure and Copilot momentum remain the primary catalysts. Azure reportedly surpassed $100 billion in annual revenue, while Microsoft 365 Copilot exceeded 30 million paid seats. Those milestones reinforce the view that Microsoft is beginning to monetize its AI investments at scale. Price Prediction: One Number Could Decide How High Microsoft Goes in 2027 Positive Sentiment: Strong quarterly results continue to support the bull case. Microsoft’s latest report showed earnings per share of $4.74 versus a $4.24 consensus estimate and revenue of $90.01 billion, up 17.7% year over year. Cloud computing and AI helped drive roughly 30% profit growth. These Telltale Signs Cue Microsoft Investors Despite Earnings Surge Positive Sentiment: Enterprise adoption and partnerships are broadening demand. Swiss companies are increasing their use of Microsoft’s AI and cloud products, with governance and data sovereignty controls supporting adoption. S&P Global also expanded its integration of AI-ready data into Microsoft 365 Copilot workflows. Swiss Enterprises Prioritize Microsoft AI Governance Positive Sentiment: Analyst and institutional sentiment remains constructive. William Blair reaffirmed a Buy rating, citing early AI monetization, while Altarock Partners increased its Microsoft position. Microsoft Buy Rating Reaffirmed Microsoft Profile (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Featured Articles Five stocks we like better than Microsoft The AI Boom Is Turning This Cable Maker Into a Stock to Watch A Star Investor Just Trimmed Amazon—Here’s What It means Wendy’s Deal Buzz May Give Fast-Food Investors a New Reason to Look Home Depot Analysts See a Path to $375 and Beyond Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT – Free Report).
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Andréa Mallard is leaving Microsoft AI, where she served as chief marketing officer. Roger Kisby/Getty Images for Pinterest Microsoft AI's chief marketing officer, Andréa Mallard, started transitioning out of her post about six months after being appointed to the role, Business Insider has learned.
In an internal email, Microsoft announced that Mallard, who joined Microsoft's AI unit from Pinterest in January, plans to leave the company.
In the June 30 memo, viewed by Business Insider, Microsoft executive Yusuf Mehdi said Mallard planned to relocate her family to Europe in August to be closer to her father, who was unwell, and that this would result in her stepping back from her role.
Microsoft confirmed Mallard's departure plans and said she'll stay on until early next year as an advisor.
"I'm grateful for the incredible energy and consumer-centric ethos she's brought to turbo-charging our Copilot marketing efforts; Andrea has played a key role in advocating for a more unified approach, including the single app experience," the memo said.
Two people familiar with the matter said Mallard's departure also reflected a recent change in strategy at Microsoft AI as the company rethinks consumer marketing. Microsoft is merging its consumer and business Copilot apps into a single application. Copilot, Microsoft's flagship generative AI product, generally lags behind other AI tools like ChatGPT and Claude.
Copilot marketing is being consolidated under Microsoft executive Jared Spataro. Microsoft AI doesn't plan to directly replace Mallard's role.
Microsoft AI, the unit where Mallard was hired as CMO, has undergone a transition in recent months. Microsoft moved Microsoft AI CEO Mustafa Suleyman to a new role focused on a superintelligence team in March, and consolidated its various commercial and consumer Copilot teams under a new executive.
Mallard has an extensive consumer marketing pedigree, having served as Pinterest's chief marketing officer for over seven years. Prior to that, she oversaw marketing at Gap's athleisure brand, Athleta, and served as CMO at the virtual care company Omada Health.
Marketing efforts during Mallard's short tenure included a Super Bowl spot showing how NFL teams could use Copilot in Excel to analyze athlete performance data and build profiles of their top prospects. Microsoft has also been working with influencers like Alix Earle, who has posted video content using Copilot on her social media accounts. Work on both these projects began before Mallard joined the company.
Writing on LinkedIn in January to announce her move to Microsoft AI, Mallard said she would be hiring talent and was on the lookout for people who were passionate about "humanist AI." She described AI as the most consequential technological shift of her lifetime.
"We have an enormous responsibility to get this right," Mallard wrote.
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Lara O'Reilly is the anchor of the CMO Insider newsletter.She is a senior correspondent who has covered the digital advertising, marketing, and media industries since 2010. Her current beat includes big tech companies like Alphabet, and Meta, and adtech firms, agencies, publishers, the creator economy, and CMOs.Lara has previously worked as a reporter and executive producer at titles including The Wall Street Journal, Digiday, Yahoo Finance, and Marketing Week. She was previously Business Insider's senior global advertising editor from 2014 to 2017.Lara is a regular guest on TV and radio and has appeared on outlets such as the BBC, NPR, SiriusXM's Wharton Business Daily, and CTV Television Network. She also frequently speaks on stage at major events such as Web Summit, IFA, VivaTech, Advertising Week, and Cannes Lions.To get in touch with Lara O'Reilly, email [email protected] or contact her on Signal at @loreilly.71
Quantum computing has significant potential to transform a host of technologies, including cybersecurity, artificial intelligence, materials science, and drug discovery. But it's still in a relatively early stage of development, which makes it difficult to guess now which quantum computing stocks might be winners over the long term.
Two companies on many investors' quantum computing radar are pure-play D-Wave Quantum (QBTS -6.42%) and tech giant Microsoft (MSFT +0.27%). Given where the quantum computing market is right now, and considering Microsoft's financial advantages, Microsoft stock is the no-brainer winner.
Image source: Getty Images.
What's happening with D-Wave right now? I get the appeal of owning a piece of D-Wave. At face value, who wouldn't want to invest in a leading quantum computing company that's betting everything on its ability to develop some of the most advanced computing systems ever to exist?
The company has recently scored some meaningful wins, too, including a 1,120% increase in bookings to $35.5 million in the second quarter. Bookings are potential revenue, not actual sales yet, but they are a good indicator that customers are very interested in D-Wave's quantum annealing technology.
AT&T is one such customer that has just agreed to expand its use of D-Wave's quantum computers, and may use them for "complex optimization challenges across its network operations." The telecom will experiment with the tech to improve its outage detection and response, manage technician routes, and plan new network expansions.
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But bookings aren't sales, and D-Wave's revenue in the quarter was just $3 million. Revenue for most quantum computing pure-play companies is lumpy because they rely on large contracts that don't come regularly. The company also isn't profitable and likely won't be for many more years, given its limited customer base and the investments it is making in developing its quantum computing technology.
That makes D-Wave a pretty risky bet right now, especially since the company's shares are trading at a hefty premium. D-Wave's stock has a price-to-sales (P/S) ratio of 610, which is drastically more expensive than the average P/S ratio of about 8 for companies in the technology sector.
Microsoft is best known these days as a leading AI player, but it has also made some big strides in quantum computing. For example, Microsoft developed what it calls a topological superconductor, or topoconductor, that can create more stable qubits -- the fundamental units of computation for quantum computers.
The processor that it has built around these topoconductors, Majorana 1, is expected to eventually help Microsoft scale up to 1 million qubits on a single processor. That's a goal many companies have set because at that scale, a fault-tolerant quantum computer would be capable of handling what the company describes as "transformative, real-world solutions."
What's more, Microsoft has already commercialized its Azure cloud system for quantum computing services. With Azure Quantum, companies can rent the service for advanced research. It's an early indicator of how Microsoft will use its successful Azure cloud business to sell quantum computing services in the coming years.
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This is especially important for investors because in its fiscal 2026, which ended June 30, Azure surpassed $100 billion in annual sales (up 41% from fiscal 2025). Microsoft remains the second-largest cloud infrastructure player, behind Amazon. This means that Azure's growing success makes it more likely that customers will naturally migrate to additional Microsoft quantum computing services as they become available.
And if all that isn't convincing enough, Microsoft reported $4.74 in earnings per share in fiscal Q4, and $19.6 billion in free cash flow. At a time when investors are growing skeptical that big tech's large investments are paying off, Microsoft has proved that it knows how to develop new technology without breaking the bank.
Oh, and its shares are well-priced, too. Microsoft's stock trades at a price-to-earnings ratio of just 27 compared to the tech sector's average of 36.
All of this makes Microsoft a great quantum computing stock to hold as the quantum computing market develops over the next five years.
A record earnings week sent Microsoft's (MSFT +0.27%) stock up 18% in the last week of July. Satya Nadella claimed that the company's custom AI accelerators are delivering up to 40% efficiency-per-watt gains over the last generation of Microsoft Maia chips. That's a signal that Microsoft is turning its huge artificial intelligence (AI) infrastructure spend into a more profitable business.
This claim matters because it suggests Microsoft can keep ramping up AI while spending less per unit of compute, and do so on its own terms rather than living on OpenAI's cost structure. Those chips include the Maia accelerator and Cobalt CPU families, designed specifically for Azure workloads and Copilot-level scale.
The message is simple: Microsoft can now get more AI work done per unit of energy and hardware by using its own silicon. That combination of lower running costs and greater control over the stack is exactly what Wall Street needs to see to remain comfortable with a $100-plus-billion-a-year AI build-out.
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The capex backdrop right now This broader efficiency story lands in a world where investors have been fixated on AI capital spending. Microsoft is on track to spend roughly $190 billion in calendar 2026, with the vast majority allocated to data centers, GPU clusters, and related infrastructure.
In FY26 alone, it spent about $116 billion on capex and still managed to grow operating cash flow to roughly $55 billion, even as free cash flow dipped to about $19.6 billion. If each rack of AI hardware runs 40% more efficiently on homegrown chips, the return on that spending improves without Microsoft needing to slow the build-out.
Less dependence on OpenAI's economics Nadella also framed Microsoft's models and chips as a more affordable option than those of OpenAI or Anthropic, whose assistants are powerful but often more expensive to run.
That matters because a large share of Azure's AI demand currently flows through OpenAI, and Microsoft's earnings disclosures show that investments in OpenAI have already weighed on net income in prior quarters.
Shifting more AI volume onto Microsoft silicon and Microsoft software models reduces its exposure to another company's pricing, margin structure, and governance risk.
Satya Nadella, CEO of Microsoft. Image source: Microsoft Corporation.
Why investors should care right now The report for fiscal year 2026 showed Azure growing about 40% to 45%, overall revenue jumping 18% to roughly $332 billion, and contracted AI revenue backlog exploding 84% year over year to about $678 billion. The stock has risen about 15% since then because that growth came with evidence that AI is expanding earnings, not just capex, and that Microsoft can keep scaling without torching its balance sheet.
For shareholders, Nadella's 40% efficiency gain is really a signal about future margins and resilience. If Microsoft can turn a $190 billion infrastructure plan into decades of high-margin AI services using cheaper, in‑house chips, the current spending spike looks less like a dangerous cash burn and more like the foundation of a long‑term cash machine.
Microsoft (MSFT +0.27%), Alphabet (GOOGL +0.06%), and Amazon (AMZN -0.71%) are building the digital land beneath the AI economy. Alphabet may lead in efficiency, and Amazon may be investing most aggressively, but Microsoft's enterprise reach and cash generation could give it the most durable path to monetizing AI at scale.
Stock prices used were the market prices of Aug. 18, 2026. The video was published on Aug. 18, 2026.
Rick Orford has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
Microsoft (MSFT +0.27%) is worth about $3.57 trillion. For the software giant to be worth $5 trillion by the end of 2029, its value needs to climb about 40% from here.
The end of 2029 is about three and a third years away, so that climb works out to about 10% a year. That's the whole prediction, reduced to arithmetic.
And what makes it worth taking seriously, I think, is how modest the required rate looks next to what the company just did. In fiscal 2026 (the fiscal year ended June 30, 2026), Microsoft grew revenue 18% to $331.8 billion and net income 31% to $133.7 billion. The fourth quarter alone brought $90 billion of revenue, up 18% year over year.
There are two ways to get to $5 trillion. One asks the earnings to do all the work. The other asks the market to pay more for each dollar of them.
Image source: Getty Images.
The earnings pathMicrosoft's stock trades at about $480 per share as of this writing, which is about 27 times the $17.95 per share the company earned in fiscal 2026.
Hold that multiple steady, and a $5 trillion Microsoft needs to earn about $187 billion a year. That is about 40% more than fiscal 2026's $133.7 billion -- the same roughly 10% annual growth rate the market value needs.
For perspective, Microsoft grew net income 31% last fiscal year alone. Some of that came from gains tied to its investment in OpenAI. Adjusted for that impact, earnings per share still rose 22%. Either number is more than double the pace the prediction requires.
And the growth drivers behind those results don't look exhausted. Azure revenue passed $100 billion for the fiscal year, and Azure and other cloud services revenue grew 43% year over year in the fourth quarter. The company's commercial remaining performance obligations (contracted revenue it hasn't yet recognized) reached $678 billion, up 84% year over year.
Next to figures like those, 10% annual earnings growth doesn't look demanding.
The market already expects part of this. The stock costs about 25 times what analysts expect the company to earn over the coming year, and that consensus calls for adjusted earnings-per-share growth of about 14% -- faster than the prediction requires.
If those expectations simply keep being met through 2029, the earnings multiple never has to budge and the company still arrives at $5 trillion.
The multiple pathNow suppose earnings growth cools. If profit growth slows to about 5% a year, Microsoft earns about $158 billion by the end of 2029 -- and reaches $5 trillion only if investors pay about 32 times earnings for it.
That would be a meaningfully richer price than today's, and it would have to take hold while growth is slowing. Investors don't usually pay richer multiples for slowing growth.
In other words, the prediction has one dependable path, not two.
The spending is the swing factorThe thing that could break the earnings path is the same thing powering it -- artificial intelligence (AI) spending. Microsoft is investing heavily in data centers to serve AI demand, and that capital spending eventually lands on the income statement as depreciation. If those costs grow faster than the revenue they support, margins compress, and 10% annual earnings growth gets harder than it sounds.
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The fiscal 2026 numbers show no sign of that in operating margin yet. Operating income rose 21% for the year, faster than revenue. But operating income is the line to watch each quarter from here.
Ultimately, $5 trillion by the end of 2029 asks Microsoft to grow earnings at about a third of the pace it just delivered, while holding the price-to-earnings ratio it already carries. Against an 18% revenue year, a 43% quarter in Azure and other cloud services, and a $678 billion backlog, I think the bar is low and the company clears it comfortably.
The caveat is that the price-to-earnings ratio, not the business, is the fragile part of the prediction. At about 27 times earnings, Microsoft isn't priced for extreme expectations. But a stretch of margin pressure from the AI build-out could compress that multiple faster than earnings grow.
The business looks capable of earning its way to $5 trillion by the end of 2029. Whether the stock gets there on time depends on that 27-times price holding up, and that part may be harder to predict.
, the world's leading enterprise software and cloud giant, held near unchanged at $480.78 Tuesday morning while the Nasdaq dropped more than 1%. In a market where investors were aggressively cutting exposure to expensive technology names, Microsoft stood firm — a sign that the AI winners with real revenue are being separated from the hype.
The reason is simple: Microsoft is turning AI spending into actual business growth. The company's latest results showed revenue climbing 18% to $90 billion, while operating income jumped 18% to $40.6 billion. Azure was the headline engine, with revenue surging 43% and crossing the $100 billion annual revenue milestone. Commercial remaining performance obligations also exploded 84% to $678 billion, giving Microsoft a massive pipeline of future revenue.
The valuation story is becoming more interesting. The GF Value chart shows Microsoft trading at $481.28 versus an estimated GF Value of $577.01, leaving the stock approximately 16.6% below its intrinsic value estimate. For a company dominating cloud, AI infrastructure, and enterprise software, that discount suggests the market may still be underestimating the durability of Microsoft's earnings power.
Microsoft's AI bet is no longer just about spending billions on data centers and chips. The payoff is already appearing in Azure demand, customer commitments, and recurring revenue. The biggest risk remains execution — turning enormous infrastructure investments into higher returns. But compared with many AI names still selling a future dream, Microsoft is showing investors the money is already starting to arrive.
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I hit the buy button on Microsoft (NASDAQ:MSFT | MSFT Price Prediction) again last week, and I will hit it again next month. The stock is down 6.91% over the past year and roughly flat year to date, sitting at $480.35. That is exactly the window I have been waiting for. The consolidation is the invitation.
The Thesis in Plain English My conviction rests on a simple read: Microsoft is deep in the expensive phase of an AI infrastructure buildout, and the software monetization on the other side is already landing in the numbers. Once capacity catches up to demand, the operating leverage shows up in earnings. I want to own the shares before that.
The receipts are on the table. Azure crossed $100 billion in full-year revenue for the first time and grew 43% year over year in the June quarter. Microsoft 365 Copilot passed 30 million paid seats, and management guided Azure to roughly 45% growth for the September quarter. Microsoft is already collecting the AI checks.
Three Reasons the Position Keeps Growing First, the backlog. Commercial remaining performance obligations reached $678 billion, up 84% year over year, with a weighted average duration of 2.3 years. Long-term investors want visibility. That is visibility.
Second, the profitability profile. Operating margin sits at 46.78%, return on equity at 34.04%, and return on invested capital at 22.01%. Full-year fiscal 2026 net income was $133.75 billion, up 31.34%. That is what compounding looks like at scale.
Third, the execution rhythm. Microsoft has delivered five consecutive EPS beats, with full-year fiscal 2026 EPS of $17.28 against a $16.78 estimate. Paying 25x forward earnings for a business growing net income above 31% works for my time horizon.
Why Not Amazon or Alphabet The two names a reader might reach for first are Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL). Both are serious cloud competitors. My money keeps landing on Microsoft because of the combination of that 46.78% operating margin, the 22.01% ROIC, and the $678 billion contracted backlog. The OpenAI relationship, with Microsoft’s IP rights extended through 2032 and OpenAI contracted for an incremental $250 billion in Azure services, is a moat I do not see replicated at either peer.
The Risk I Take Seriously Free cash flow fell 6.46% for the full year, and Q4 free cash flow dropped 23.19% as capex jumped 109.63% in the quarter to $35.80 billion. Management is guiding calendar 2026 capex to roughly $175 billion, and every dollar of that flows to the power, cooling, and networking suppliers we profiled in a free report on seven AI infrastructure names that are not chipmakers. If enterprise AI demand stalls, that spend becomes a millstone. I keep buying because CFO Amy Hood said on the call that “demand continues to exceed available supply” and because the RPO backlog is climbing faster than the capex line. Supply is the current constraint.
Why the Buy Button Stays Active The shares traded at $517.85 at the October filing and sit lower today after a strong month. Analyst consensus target is $569.56. I buy because a business earning 34% on equity, growing revenue 17.79%, and sitting on a $678 billion order book is exactly what I want funding the next stage of my retirement account. The consolidation will end. My cost basis will not.
Contact [email protected] for any questions or corrections.
Alphabet's Google (GOOG) is set to acquire internal business information from bankrupt Spirit Airlines for $10 million, with the data intended for product development and artificial intelligence model training.
The transaction covers operational and workplace records rather than customer financial information. Google said the material will be de-identified before the transfer and will exclude personally identifiable information.
The assets include employee email, Microsoft Teams communications, spreadsheets, calendars and other records tied to marketing, productivity and airline operations. The collection reportedly contains roughly 100 million emails and 500 million Teams messages.
Mercor, an AI-focused data company, also sought the assets with a $7.5 million offer. Google secured the winning bid at $10 million, while a U.S. bankruptcy court is expected to review the transaction at a Wednesday hearing.
Spirit stopped operating earlier in 2026 after failing to complete its restructuring during a second Chapter 11 bankruptcy case. Its remaining assets are being sold through the court-supervised process. Microsoft (MSFT) is not a party to the transaction; its Teams platform is referenced only because some of the acquired business records were stored there.
Microsoft (NASDAQ:MSFT | MSFT Price Prediction) just wrapped a fiscal year where Azure crossed $100 billion in annual revenue and Microsoft 365 Copilot passed 30 million paid seats.
Yet the stock is essentially flat on the year, down 0.23% YTD and 6.91% over the past year. Shares closed at $480.35. Can Microsoft hit $650 by August 2027? Here is the math and where Wall Street is under-modeling the story.
What’s Holding Microsoft Back Right Now The disconnect is capex fatigue overwhelming otherwise strong fundamentals. Microsoft committed $115.95 billion in FY2026 capital expenditures, up 79.62% year over year, and management guided FY27 capex to roughly $175 billion after a lease-classification change. Free cash flow fell 6.46%.
Traders noticed. Shares are down 5.08% in the past week even after a 21.97% one-month bounce off the July lows. With a beta of 1.099, MSFT is not a hiding place when the AI capex trade wobbles. The Yahoo Finance framing was on the nose: Azure and capex would decide the reaction. Capex won the argument, at least for now.
Wall Street Sees 19% Upside. Our Model Says 24% Analysts carry an average target of $569.56, with 14 Strong Buys, 40 Buys, 3 Holds, and zero Sells. That is 95% bullish sentiment. Our base case is more aggressive at $596.04, implying 24.08% upside with a 0.9 confidence score (high).
The bull scenario stretches to $620.06. Analysts are anchored on the current capex cycle and underweighting the $678 billion commercial RPO backlog, up 84%. That is contracted revenue on the books. Consensus feels one multiple turn too conservative.
The Path to $650 Per Share Reaching $650 from $480.35 requires a 35.3% gain. That is above both our base and bull cases, demanding multiple expansion on top of earnings delivery.
With forward EPS of $19.96, a price of $650 implies a forward P/E of 33x. Our base case of $596.04 already implies 28x, meaning the bold target requires roughly 5x additional multiple expansion.
Why that re-rating is plausible: the 247Factor adjustment of 1.154 is driven by a 1.15 technology sector multiplier, 31.7% earnings growth, and 95% bullish analyst tilt. Azure is guided to 45% constant-currency growth in Q1 FY27, with “demand continues to exceed available supply” per CFO Amy Hood.
Satya Nadella framed the flywheel this way: “We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results.”
If Copilot ARPU expands under the new per-seat plus consumption billing model, FY27 EPS beats the $19.96 anchor and the multiple math gets easier. The single biggest risk is a demand pause that turns record capex into stranded capacity.
Where Microsoft Trades Today vs Its Earnings Power At $480.35 against $19.96 forward EPS, MSFT trades at roughly 24x forward earnings. For a business compounding revenue at 17.79% and net income at 31.34%, that is not a demanding multiple.
Shares sit 4% below the 52-week high of $550.24 and well above the $349.20 low. MSFT is up 837.03% over ten years. Cheap on growth, expensive only on absolute price.
Is $650 Realistic? Here’s My Take $650 requires a 35.3% gain and a re-rate to 33x forward earnings. That is a stretch, but defensible.
Three things need to go right: Azure growth stays north of 40% into FY27, the $678 billion RPO converts to reported revenue on schedule, and Copilot consumption billing lifts monetization above per-seat expectations. Any signal that AI capex is running ahead of enterprise demand derails it (we mapped the power, cooling, and networking suppliers riding the same buildout in a free report here: 7 Stocks Powering the AI Boom). We’ve outlined the blueprint for how Microsoft could reach $650 in 2027.
Contact [email protected] for any questions or corrections.
First Nebraska Trust Co purchased a new position in shares of Microsoft Corporation (NASDAQ: MSFT) in the undefined quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The institutional investor purchased 90,880 shares of the software giant's stock, valued at approximately $33,641,000. Microsoft comprises about 3.1% of First
Flagship Wealth Advisors LLC lowered its stake in shares of Microsoft Corporation (NASDAQ: MSFT) by 40.6% during the first quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 3,176 shares of the software giant's stock after selling 2,173 shares
Empowered Funds LLC grew its stake in Microsoft Corporation (NASDAQ: MSFT) by 44.6% during the undefined quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The firm owned 806,973 shares of the software giant's stock after purchasing an additional 248,709 shares during the quarter. Microsoft makes
Farmers National Bank raised its position in shares of Microsoft Corporation (NASDAQ: MSFT) by 7.2% during the first quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 56,251 shares of the software giant's stock after acquiring an additional 3,796 shares during the period. Microsoft
FAS Wealth Partners Inc. raised its stake in Microsoft Corporation (NASDAQ: MSFT) by 3.1% in the undefined quarter, according to its most recent filing with the SEC. The fund owned 49,116 shares of the software giant's stock after purchasing an additional 1,497 shares during the period. Microsoft accounts for approximately 1.1% of FAS
Curry Webb Wealth Management LLC purchased a new position in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) in the 1st quarter, according to its most recent Form 13F filing with the SEC. The firm purchased 1,157 shares of the software giant’s stock, valued at approximately $428,000.
A number of other institutional investors and hedge funds have also recently added to or reduced their stakes in MSFT. Vanguard Group Inc. increased its holdings in shares of Microsoft by 2.3% during the fourth quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after purchasing an additional 15,955,898 shares during the period. State Street Corp boosted its stake in shares of Microsoft by 2.1% in the fourth quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock valued at $148,060,557,000 after buying an additional 6,388,930 shares during the period. Geode Capital Management LLC grew its position in Microsoft by 1.1% during the fourth quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock worth $88,056,019,000 after buying an additional 1,911,142 shares in the last quarter. Morgan Stanley grew its position in Microsoft by 0.8% during the fourth quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock worth $58,624,690,000 after buying an additional 980,439 shares in the last quarter. Finally, Norges Bank bought a new position in Microsoft during the 4th quarter worth $50,664,631,000. 71.13% of the stock is owned by institutional investors and hedge funds.
Wall Street Analyst Weigh In
A number of analysts have recently weighed in on the company. Weiss Ratings reiterated a “hold (c)” rating on shares of Microsoft in a research report on Monday, July 6th. Raymond James Financial cut Microsoft from a “market perform” rating to a “market perform” rating in a research report on Tuesday, May 5th. BMO Capital Markets boosted their price target on Microsoft from $500.00 to $515.00 and gave the company an “outperform” rating in a research note on Thursday, July 30th. Cantor Fitzgerald upped their price objective on shares of Microsoft from $502.00 to $522.00 and gave the stock an “overweight” rating in a research report on Monday, July 27th. Finally, UBS Group set a $525.00 price target on Microsoft in a research note on Thursday, July 30th. Forty-two analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $560.27.
Get Our Latest Stock Report on MSFT
Microsoft Stock Down 3.0%
Shares of NASDAQ:MSFT opened at $480.35 on Tuesday. The company has a market capitalization of $3.57 trillion, a PE ratio of 26.75, a price-to-earnings-growth ratio of 1.59 and a beta of 1.10. Microsoft Corporation has a 52-week low of $349.20 and a 52-week high of $553.72. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The company has a fifty day moving average of $412.64 and a 200-day moving average of $408.06.
Microsoft (NASDAQ:MSFT – Get Free Report) last issued its earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The business had revenue of $90.01 billion during the quarter, compared to analysts’ expectations of $87.62 billion. During the same quarter in the prior year, the firm earned $3.65 EPS. The business’s revenue for the quarter was up 17.7% compared to the same quarter last year. On average, equities analysts predict that Microsoft Corporation will post 19.59 EPS for the current fiscal year.
Microsoft Dividend Announcement
The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be issued a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio (DPR) is 20.27%.
Insider Buying and Selling
In related news, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the sale, the chief executive officer directly owned 110,477 shares in the company, valued at $50,928,792.23. This trade represents a 12.30% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP Takeshi Numoto sold 4,810 shares of the business’s stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the sale, the executive vice president directly owned 42,677 shares in the company, valued at $21,188,276.96. The trade was a 10.13% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 37,310 shares of company stock valued at $17,256,219. 0.03% of the stock is owned by company insiders.
More Microsoft News
Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Microsoft’s Azure business reportedly surpassed $100 billion in annual revenue, reinforcing confidence that AI demand is translating into substantial cloud growth. The company’s strong recent earnings, rising Microsoft 365 seat count and increasing adoption of premium E7 and Copilot offerings provide additional long-term growth support. Azure revenue article Microsoft 365 seats article
Positive Sentiment: William Blair reaffirmed a Buy rating, citing early AI monetization and a constructive long-term risk-reward profile. Other coverage highlighted Microsoft’s ability to generate cash while investing heavily in AI infrastructure, distinguishing it from some competitors. Microsoft Buy rating article
Positive Sentiment: Microsoft is developing its Maia 300 AI accelerator, potentially reducing dependence on Nvidia processors and improving supply flexibility and infrastructure economics over time. Maia 300 chip article
Neutral Sentiment: A partnership with Plug Power tested hydrogen fuel-cell backup power for Microsoft data centers. The trial could support data-center resilience, but Plug’s CEO said it does not represent a strategic pivot or an immediate material change for Microsoft. Plug Power and Microsoft article
Negative Sentiment: A Guardian investigation raised questions about a possible shortfall in advanced AI chips installed across Microsoft’s facilities relative to its stated data-center expansion plans. Reports cited a potential gap of roughly 2.2 million chips, fueling concerns about deployment timing, capacity and near-term AI revenue growth. Microsoft chip capacity article
Negative Sentiment: Morgan Stanley warned that heavy AI capital expenditure and rising debt-related obligations could pressure hyperscaler credit quality. Although Microsoft has a strong balance sheet, the warning increases scrutiny of whether massive infrastructure spending will generate adequate returns. Morgan Stanley hyperscaler warning
Microsoft Company Profile
(Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
Further Reading
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Birkenstock Beats the Skeptics—But Not on EPS
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Chelsea Counsel Co. lessened its position in Microsoft Corporation (NASDAQ: MSFT) by 16.9% in the first quarter, according to its most recent disclosure with the SEC. The firm owned 17,488 shares of the software giant's stock after selling 3,560 shares during the period. Microsoft makes up about 2.8% of Chelsea Counsel Co.'s holdings,
Microsoft (NASDAQ: MSFT | MSFT Price Prediction) and Alphabet (NASDAQ: GOOGL) both delivered blockbuster quarters while spending at a pace that would sink a lesser balance sheet. Microsoft reported fiscal Q4 on July 29, 2026. Alphabet reported Q2 on July 22, 2026. With AI CapEx anxiety rising, the question is which business absorbs a slowdown.
Azure Hits $100B, Google Cloud Sprints to 82%
Microsoft posted revenue of $90.01 billion, up 17.75% YoY, with Intelligent Cloud at $39.31 billion (+32%) and Azure crossing $100 billion in annual revenue at 41% growth. Copilot monetization is the real tell: 30 million paid Microsoft 365 Copilot seats with net seat adds more than doubling quarter over quarter. That is recurring, per-seat B2B revenue funding the buildout.
Alphabet delivered $119.80 billion in revenue, up 24.23%, with Google Cloud at $24.77 billion, up 82%. Pichai noted that “nearly 90% of the Fortune 100” use Gemini Enterprise. Search plus YouTube ads still make up the bulk of the base, and CapEx hit $44.92 billion in a single quarter, pushing free cash flow to negative $5.86 billion.
Cash Cushion vs. Debt-Funded Sprint
Lens
Microsoft
Alphabet
FY CapEx
$115.95B
$175 to $185B guided for 2026
Free Cash Flow
+$67B FY26
Negative in Q2 26
Buybacks
$22.27B returned
Suspended in Q2 26
Backlog
$678B RPO (+84%)
~$460B Cloud backlog
Alphabet raised roughly $70 billion in combined equity and debt and long-term debt jumped from $46.5B to $98.2B. Microsoft funded its buildout from operations: operating cash flow grew 34.4%. CFO Amy Hood argued the spend is throttleable, calling GPUs and CPUs “short-lived assets” that can be slowed “if the demand environment changes.”
Alphabet’s hedge is silicon economics. Its proprietary TPU stack gives it lower unit-cost silicon economics compared to peers relying purely on third-party GPUs, a real advantage if GPU pricing spikes.
The Next Test Is Payback Timing
Watch whether Copilot’s usage-based billing converts 30 million seats into consumption revenue fast enough to justify Nadella’s plan to roughly double overall capacity in just two years. For Alphabet, the question is whether Cloud growth stays near 80% while Search absorbs generative AI disruption. MSFT is up 21.97% over the past month, while GOOGL slipped 13.28% over the past three months.
The Downside Case Favors Microsoft’s Balance Sheet
If AI monetization slips a year, I want the balance sheet that can sit still without cutting buybacks or issuing equity. That is Microsoft. Copilot’s per-seat pricing gives visible ARPU, and Azure’s $678B RPO is contracted work. Alphabet is the more interesting long ball. TPUs, Gemini reach, and Search cash flow could win if CapEx pays back on schedule. All of this spending still has to be powered, cooled, and networked by somebody, and we pulled together seven suppliers doing exactly that in a free AI infrastructure report. For investors prioritizing capital preservation through an AI air pocket, Microsoft’s balance sheet resilience stands out. Those with tolerance for a suspended buyback and negative FCF quarter tied to AI infrastructure buildout may find Alphabet’s setup more compelling.
Contact [email protected] for any questions or corrections.
Microsoft (MSFT) posted stellar quarterly results, with revenue up 18% and operating income rising 21%, driven by Azure's 43% growth and efficiency gains. Azure's acceleration, robust backlog, and successful Copilot adoption highlight strong execution, but valuation has become less attractive after the recent rally. Commercial RPO surged 84% to $678B, with growth increasingly diversified beyond OpenAI, addressing concentration concerns and supporting the medium-term growth thesis.
SUN VALLEY, IDAHO - JULY 09: Bill Gates, co-founder of Microsoft and co-chair of the Bill & Melinda Gates Foundation, attends the Allen & Company Sun Valley Conference at the Sun Valley Lodge on July 9, 2026 in Sun Valley, Idaho. (Photo by Kevin Dietsch/Getty Images)
Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
Management no longer begins discussions with cloud migrations, and what has taken their place is priced differently.
Over the course of two years of earnings calls, Microsoft (MSFT) has subtly altered its focus. The growth narrative once emphasized transferring customers’ current workloads into its cloud services. It now prioritizes agents, model selection, and a usage meter. This strategic shift is proving effective, reshaping the revenue profile for shareholders.
Migrations Were A Recognized Growth Catalyst A Year AgoOn the fiscal 2025 first-quarter call the CEO described continued growth in cloud migration, and on the fiscal 2025 fourth-quarter call migrations were accelerating again. By the fiscal 2026 fourth-quarter results, cloud migration no longer leads the prepared remarks, which turn first to the AI platform and infrastructure. Its place has been taken by agents as the workload, inside a model system in which any single model is substitutable. The base is large: Microsoft Cloud passed $168 billion of annual revenue in fiscal 2025, up 23%, and $214 billion in fiscal 2026, up 27%. Microsoft’s overall revenue for fiscal 2026 surpassed $331 billion, up 18%. The cloud grew faster even as management changed the driver it credits.
Per Seat Plus Consumption Represents A Distinct Revenue ModelAs Microsoft transitioned to usage-based pricing throughout the quarter, Copilot revenue on GitHub surged over 60% quarter on quarter. However, that same usage impact affected the gross margin of Intelligent Cloud, although management indicated that margins improved over the quarter due to the business model transition. Azure's usage revenue remains capacity-constrained: management states demand continues to outpace available capacity. The base engine is lagging, with paid M365 Commercial seats increasing by 6% year over year compared to a 14% increase in reported M365 Commercial cloud revenue during the same quarter, thus the additional revenue stems from usage and premium packages within the existing user base.
The Subdued Segment Is The On-Premises Server DivisionOne reason the migration topic has quieted is due to the business that those migrations originated from. Revenue in the on-premises server segment remained relatively stable year over year in the fourth quarter of fiscal 2026, declining by 1% when adjusted for constant currency. Management projects a decrease in the low to mid-single-digits for fiscal Q1 2027 due to an ongoing shift of customers to cloud solutions and a comparison with the previous year's results.
This transition has not halted; it has simply fallen out of the spotlight. The overall company data indicates no pressure: trailing-twelve-month revenue growth accelerated to 17.8%, with net margin at 40.3%, its highest three-year value.
The M365 Commercial Cloud Growth Rate Will Clarify ThisThis represents a pivot rather than a withdrawal: management anticipates another fiscal year of double-digit revenue and operating income growth in fiscal 2027, with full-year operating margins declining by less than one percentage point. For fiscal Q1 2027, management projected M365 Commercial cloud growth of about 16% in constant currency, adjusting for prior-year revenue recognition, equating to 15% on an as-reported basis, and expects it to gain momentum throughout fiscal 2027 as usage-based billing becomes more prevalent. Acceleration suggests the meter is generating revenue in addition to the seats; a flat trajectory implies the seats remain effective, and rankings of companies whose guidance continually improves are created for that very inquiry.
Most earnings-season numbers are designed to be seen: revenue growth gets announced, earnings per share gets a headline, capital expenditure plans get a slide. The line that reveals who holds power in a commercial relationship rarely receives that treatment because it sits on the cash flow statement in a category most readers skim past: the change in accounts receivable.
When receivables grow faster than the underlying business, a company is quietly financing its customers. Andrew Sather, on The Investing for Beginners Podcast, made the case that “sometimes that can signal kind of power dynamics between two companies,” and he pointed to Microsoft (NASDAQ:MSFT | MSFT Price Prediction) as the example worth studying. The reason his framing matters now is that the artificial intelligence buildout is being financed as much through working capital as through capital expenditure, and the shape of those balances is visible before it shows up in a headline growth rate.
What the Receivables Line Actually Reveals
Microsoft’s current net receivables stood at $80.876 billion at the close of fiscal 2026, up from $69.905 billion a year earlier and $56.924 billion the year before that.
The direction is steady and upward. Sather’s argument is that a supplier extending ever larger amounts of unpaid credit to a dominant customer sits in a different negotiating position than one that collects on time. He attributes part of Microsoft’s pattern to its compute relationship with OpenAI, though that connection is his interpretation rather than a disclosed fact. The broader point holds: concentration multiplies collection risk and the leverage the customer has when contracts come up for renewal.
Sather frames this as “Everything depends on context. Everything has kind of levels to it,” rather than a way to label a company good or bad. A rising receivables balance at a company sitting on Microsoft’s cash reserves signals something different than the same pattern at a smaller supplier without them. He offers the counterexample of heavy equipment sold into multi-year data center construction, where large outstanding balances describe the normal shape of the business.
The Other Side of the Ledger
The mirror image of receivables is contracted revenue not yet recognized, and this is where Microsoft’s position looks like a company that has bound its customers in. Commercial remaining performance obligations grew 84% to $678 billion, with a weighted-average duration of 2.3 years and roughly 30% expected to convert to revenue in the next 12 months.
CFO Amy Hood noted that “all sequential commercial RPO growth was driven by commitments from customers outside of frontier model companies,” and that RPO increased 25% when excluding OpenAI. That disclosure answers the concentration question most directly and deserves to be read alongside the receivables line.
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has run a similar playbook at smaller scale, with a cloud backlog that recently crossed $460 billion, and NVIDIA (NASDAQ:NVDA) sits on the hardware side of the same trade with $38.466 billion in receivables, a figure reflecting the payment terms typical of channel distribution rather than a subscription business. Reading Microsoft’s receivables line in isolation misses that Azure grew 43% in the quarter and crossed $100 billion in annual revenue for the first time.
What an Ordinary Investor Should Do With This
Track the change over several years rather than a single snapshot. Ask whether one customer represents a large enough share of revenue that a collection delay would matter, and look at related disclosures, particularly any allowance for doubtful accounts and any deferred or unearned revenue, which describes the opposite situation of cash collected before the work is done.
Microsoft’s operating cash flow reached $182.9 billion in fiscal 2026, on net income of $133.7 billion, against capital expenditures of $115.9 billion. A rising receivables balance at a business generating that much cash is a different conversation than the same pattern at a company financing growth with debt.
The weight an ordinary investor should give this line is real but bounded. It is a useful early indicator of who is bending toward whom in a contract negotiation and deserves attention during an infrastructure buildout of this scale, when the most consequential relationships in AI are being written into multi-year commitments before they are visible in reported revenue.
It complements, rather than replaces, reading what the company says about concentration, duration, and collections, and it stops well short of a conclusion about credit risk at a firm carrying $758 billion in total assets. Sather’s contribution is to remind readers that revenue growth is the number that is easiest to report and hardest to trust, and that the working capital lines are where the story often shows up first.
Contact [email protected] for any questions or corrections.
ZÜRICH--(BUSINESS WIRE)---- $III #AI--Swiss firms are adopting Microsoft AI and cloud technologies to connect data, AI and business processes while maintaining control over AI, ISG says.
Tim Nyland offers his bearish and bullish thoughts for the back half of 2026 on expectations that the Fed will hold interest rates. He considers the broadening price action across Wall Street healthy for stocks long-term as investors reconsider previous views on AI CapEx.
Investment banker Morgan Stanley sounded an alarm on the artificial intelligence industry this morning -- and took a chunk out of Microsoft's (MSFT -3.04%) market cap when it did it. AI revenue isn't rising as fast as AI cost, and Microsoft could end up poorer as a result.
Shares of the mega-tech hyperscaler stock are down 3.2% through 1:45 p.m. ET.
Image source: Microsoft.
Why Microsoft investors might worry Hyperscalers as a whole are expected to grow their capital spending 57% this year, relative to 2025, says Morgan Stanley. Microsoft, in particular, plans to spend $190 billion as it builds out its AI infrastructure.
This much was already known.
What's new today is that Morgan Stanley is warning that "the gap between capital deployment and revenue generation continues to pressure near-term cash generation." At least some hyperscalers simply aren't generating enough free cash flow to cover their enormous cash outlays. And as a result, MS forecasts that some companies will need to take out more loans to cover the gap -- and pay higher interest rates to do so.
Today's Change
(
-3.04
%) $
-15.05
Current Price
$
480.35
What this means for Microsoft stock The good news is that Morgan Stanley says higher-quality borrowers will probably pay less extreme interest rates than lower-quality borrowers (such as Oracle (ORCL -2.57%), which has a rated mid-to-low BBB credit rating, reports StreetInsider.com).
The better news is that Microsoft is arguably one of the best credit risks out there in hyperscaler land. Although Microsoft is carrying a pretty substantial debt load of $129 billion, it has $77 billion in the bank to cover its payments and is generating gobs of free cash flow -- even after paying for capital investment: $67 billion is expected this year, according to data from S&P Global Market Intelligence.
Long story short, despite MS's misgivings, Microsoft stock will be just fine.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Oracle. The Motley Fool has a disclosure policy.
Microsoft's stock is trading well below the earnings multiple it has averaged over the past five years. It has some promising opportunities ahead due to artificial intelligence, and it recently reached 30 million paid subscriptions for Microsoft 365 Copilot.
Okta (OKTA), the identity and access management software provider, rose 1.59% intraday after Wells Fargo upgraded the stock to Overweight from Equal Weight with
Microsoft MSFT shares fell about 3.2% on Monday after a Guardian investigation raised questions about whether the company has enough advanced chips installed to support its rapid artificial intelligence infrastructure expansion.
The report pointed to a potential gap between Microsoft's stated data-center expansion and the number of AI chips installed across its facilities.
Microsoft disputed the calculations, saying the estimates were based on incorrect assumptions.
The concerns come shortly after JPMorgan raised its price target on Microsoft, citing stronger growth prospects for Azure and Microsoft 365 Commercial Cloud as AI infrastructure spending accelerates.
The Guardian reported that Microsoft had 2.2 million AI chips installed in its global data centers, based on internal documents reviewed by the publication.
That compares with an earlier target of 1.8 million chips by the end of 2024. The report said the figure was lower than some estimates based on Microsoft's stated data-center capacity.
Microsoft has said it added 5 gigawatts of data-center capacity over the past two years as part of its AI buildout and now operates hundreds of data centers across five continents.
However, estimating the number of operational facilities and AI chips remains difficult because the company reports capacity largely in terms of power rather than individual chips.
Shaolei Ren, a professor at the University of California, Riverside, questioned whether Microsoft's reported capacity figures provide enough context. “They are giving insufficient context,” Ren said, while noting that Microsoft's audited sustainability reports provide another measure of its infrastructure.
Microsoft rejected the Guardian's calculations, saying they drew “the wrong conclusions from incorrect assumptions.” The company also said it does not disclose the volume of specific chips used in its AI infrastructure.
The concerns over chip availability contrast with JPMorgan's more bullish view of Microsoft's AI business.
The bank raised its December 2027 price target to $625 from $550 and maintained an Overweight rating.
Analyst Samik Chatterjee said the company could see accelerating growth in Azure and Microsoft 365 Commercial Cloud, with AI infrastructure investment serving as a key driver.
Chatterjee also pointed to Microsoft's Copilot products as an important source of potential revenue growth.
He estimated that stronger Copilot adoption could generate between $24 billion and $41 billion in additional revenue, before potential monetization through AI credit sales.
Microsoft's AI infrastructure spending has also helped support Azure, with Chatterjee highlighting what he described as consistent execution and recent acceleration in the business.
The Guardian report suggested that the issue may not necessarily be a shortage of chips.
Microsoft CEO Satya Nadella previously said the company could have chips sitting in inventory that could not be used because of a lack of completed data-center facilities and available electricity. “It’s not a supply issue of chips,” Nadella said.
The report also highlighted Microsoft's Fairwater data-center project in Wisconsin and Georgia, saying parts of the development appeared to remain unfinished despite earlier comments that the Wisconsin facility was going live.
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The problem with comparing across big tech CEOs is that they’re often running pretty foundationally different businesses.
And while I’m not claiming that Meta Platforms (NASDAQ:META | META Price Prediction) under Mark Zuckerberg and Microsoft (NASDAQ:MSFT) under Satya Nadella are perfectly comparable, the similarities are unmistakable.
Both run advertising-and-cloud franchises with elite margins, both are aggressively spending on AI infrastructure, and both are far enough into their tenures that the operational metrics CEOs can directly influence are all a fair way to look at how they’ve performed. I’m talking stuff like return on invested capital (ROIC), return on equity (ROE), return on assets (ROA), and operating margin.
Metric (TTM) Microsoft (Nadella) Meta (Zuckerberg) ROIC 22% 20.7% Return on equity 34% 30.2% Return on assets 19.4% 18.8% Operating margin 47% 41% ROIC measures how much operating profit each dollar of invested capital returns, which is why it is the anchor of any CEO comparison: It does not flatter thin-equity balance sheets the way ROE can. As you can see, Microsoft leads it narrowly over the last 12 months, and its lower debt-to-equity ratio means Nadella is generating that return with a leaner balance sheet.
It’s interesting that even with that leaner balance sheet, Microsoft is still beating Meta on ROE – the gap on ROA and operating margin is just enough that even with the leverage Meta is getting off its debt, Microsoft is doing better on every measurable metric.
Not by much – but by enough.
Digging deeper Of course, these things are never entirely clean. Meta’s Q2 FY26 included $2.40B in legal charges and $1.18B in severance tied to roughly 8,000 job cuts, compressing operating margin to 31% from 43%. That quarter’s EPS of $6.18 missed the $7.22 consensus by 14.42%, and free cash flow fell to $784M from $8.6B while capex rose 82.1% to $30.1B. Q1 FY26 ran the other way, with an $8.03B income tax benefit.
Microsoft’s returns were flattered by strategic-investment mark-ups: a $3.2B gain from its Anthropic investment in Q4 FY26, and $7.6B in net gains from OpenAI investments in Q2 FY26, partly offset by $3.1B of OpenAI investment losses in Q1 FY26.
Meta absorbed real cash charges inside the window while Microsoft marked up equity stakes. Put differently, part of the operating-margin gap reflects accounting treatment rather than operations.
It’s more than just the numbers The genuine case for Zuckerberg starts with the advertising engine. Q2 FY26 revenue grew 28% to $60.8B and advertising grew 27% to $59B, with family daily active people reaching 3.6 billion, up 3%. Gross margin runs around 82%, structurally higher than Microsoft’s cloud-and-hardware mix, and Meta’s operating margin of 41% reflects that this remains one of the greatest advertising businesses ever built. Zuckerberg framed the current phase directly: “We are now at a point where our investments in AI are accelerating every major part of our core business.” The open question is capital allocation: 2026 capex guided to $130B to $145B against free cash flow of $784M is a bet that only pays if the AI stack compounds.
The case for Nadella rests on a different kind of evidence. Azure grew 43% and crossed $100B in full-year revenue. Microsoft Cloud reached $59.3B, up 27%. Commercial remaining performance obligation rose 84% to $678B, a contracted backlog few software franchises have ever matched. Microsoft 365 Copilot passed 30 million paid seats.
Full-year results: FY26 revenue of $332B, up 18%, with net income of $134B, up 31%, on FY26 capex of $116B. Nadella described the year in one line: “This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats.”
What counts I mean, let’s face facts: Nadella is the better operator on all four measures as of now, but the margin is narrow on ROIC, ROE and ROA, and clear only on operating margin. And of course, some portion of that operating-margin gap reflects Meta absorbing legal and severance charges inside the window while Microsoft was marking up AI stakes, so the sweep is real but not purely operational. And while the conclusion, I think, is pretty clearly that Nadella is the better CEO based on what we know now…things absolutely could change. In my view, Microsoft’s next year of Azure capacity delivery will decide whether the gap widens or closes.
Contact [email protected] for any questions or corrections.
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Microsoft (NASDAQ: MSFT | MSFT Price Prediction) and Alphabet (NASDAQ: GOOGL) both closed their latest quarters with cloud growth that dwarfed the rest of the hyperscaler field. Microsoft posted $90.01 billion in fiscal Q4 revenue, while Alphabet delivered $119.80 billion in its Q2. Both are pouring cash into AI infrastructure at a scale no rival can match, and their results just showed why the gap is widening.
Azure Scales the Ladder. Google Cloud Sprints Up It. Microsoft’s Intelligent Cloud segment printed $39.31 billion, up 32%, with Azure growing 43% and crossing $100 billion in annual revenue for the first time. Satya Nadella framed the moment plainly: “We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results.” Copilot now sits at over 30 million paid seats, anchored by anchor deployments like NHS England (505,000 clinicians) and EY (400,000 employees).
Alphabet’s Google Cloud, meanwhile, accelerated to 82% growth on $24.77 billion. Sundar Pichai noted nearly 90% of the Fortune 100 use Gemini Enterprise, while the Gemini App reached 950 million monthly active users. Off a smaller base, Google is compounding faster.
Two Cash Engines, Two Financing Playbooks The real separator is what happens under the capex avalanche. Microsoft spent $35.80 billion on capex in Q4 and still generated $19.64 billion of free cash flow. Alphabet spent $44.92 billion and slipped to negative $5.86 billion FCF, raised roughly $70 billion in equity and debt, and suspended buybacks. Both firms lean on custom silicon (Microsoft’s Maia and Alphabet’s TPUs) to compress unit economics in a way peers reliant purely on third-party chips cannot easily match.
Lens Microsoft Alphabet Cash cushion High-margin enterprise SaaS Search and YouTube ad engine Contracted backlog $678B RPO, +84% $460B+ cloud backlog 2026 capex $115.95B FY26 $175B to $185B guide Buybacks Ongoing plus dividend Suspended in Q2 What I’m Watching Into 2027 The next test is whether capex converts to durable margin. Microsoft guided to approximately 45% Azure growth in constant currency for Q1 FY27, and Amy Hood flagged that demand continues to exceed supply. For Alphabet, the question is when Google Cloud’s operating income catches up to its top-line pace, and whether ad revenue can keep absorbing an interest expense that jumped roughly 5x year over year.
Why I Lean Microsoft for Stability, Alphabet for Upside On the data, Microsoft profiles as the steadier compounder. A 27 P/E on that RPO base and positive FCF while spending like a utility is rare. Analysts agree, with 95% bullish sentiment and a $569.56 target. Alphabet is the higher-variance pick. Its cloud is accelerating faster and shares carry 27.48% modeled upside to $440.96, but negative FCF and suspended buybacks demand patience. Investors prioritizing ballast may find Microsoft’s profile more appealing, while those seeking sharper AI beta may gravitate to Alphabet.
Contact [email protected] for any questions or corrections.
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August’s action shows an interesting divergence. Mega-cap tech has cooled off the highs while institutional ownership across the biggest cloud franchises keeps grinding higher. Berkshire Hathaway’s disclosure of a new 48-million-share Alphabet position is the loudest signal, but the quieter tell is in the ownership stats: institutions hold 76.36% of Microsoft, 81.17% of Alphabet, and 68.69% of Amazon. When multi-quarter capex commitments start showing up in contracted backlog, professional money tends to accumulate through the noise.
Three names stand out this month, each backed by concrete data on cloud acceleration, AI monetization, and analyst positioning.
Microsoft (MSFT) Microsoft (NASDAQ:MSFT | MSFT Price Prediction) closed Thursday at $495.40, up 25.22% over the past month after the fiscal Q4 report. The setup here is unusual: the stock is trading roughly 3% below its 52-week high of $550.24, yet analyst positioning has firmed. 54 of 57 covering analysts rate the stock Buy or Strong Buy, with a $567.20 consensus target.
The bull case starts with the backlog. Commercial remaining performance obligations grew 84% to $678 billion, and Azure crossed $100 billion in annual revenue, up 41%. Q4 revenue of $90 billion grew 18%, with non-GAAP EPS of $4.74. Microsoft 365 Copilot passed 30 million paid seats, and CEO Satya Nadella noted that "Azure revenue surpassed $100 billion for the first time". At 27x trailing earnings, investors are paying a reasonable multiple for a business compounding earnings at 31.7% year over year.
Risk to watch: capex intensity is real. FY2026 capital expenditures ran $115.95 billion, up 79.62%, and Q4 free cash flow of $19.6 billion reflects that squeeze. Any deceleration in Azure bookings and the market will re-rate quickly.
Alphabet (GOOGL) Alphabet (NASDAQ:GOOGL) is the cheapest of the three at a 17x trailing P/E with a PEG of 0.969. Shares finished Thursday at $345.90, up 10.65% year to date and 70.93% over the trailing year. Berkshire’s recently disclosed 48-million-share position is the headline institutional endorsement, and it lands alongside a Q2 report that keeps looking better on re-read.
Google Cloud revenue accelerated to $24.77 billion, up 82% year over year, from 63% growth in Q1. Total Q2 revenue of $119.80 billion grew 24.2%, and operating income of $40.77 billion rose 30% as the operating margin expanded to 34%. CEO Sundar Pichai flagged that "nearly 90% of the Fortune 100" now uses Gemini Enterprise, with the Gemini App at 950 million monthly active users. Analyst coverage has become one-sided: 58 of 64 covering analysts rate the stock Buy or Strong Buy with a $428.04 target.
Risk to watch: free cash flow turned negative to -$5.86 billion in Q2 as Alphabet raised roughly $70 billion in equity and debt to fund its AI buildout, and long-term debt jumped from $46.5 billion to $98.2 billion. The buyback pause is a warning that management is prioritizing capacity over per-share optics for now.
Amazon (AMZN) Amazon (NASDAQ:AMZN) closed at $262.65, up 13.79% year to date. Analyst enthusiasm is the strongest in the group: 59 of 62 covering analysts rate the stock Buy or Strong Buy with a $325.19 consensus target.
Q2 revenue of $200.61 billion grew 19.6%. AWS grew 36.7% year over year, its fastest pace in 18 quarters, on an annualized run rate of $169 billion with an operating margin of 39%. AI and custom chips each cleared $25 billion annualized run rates growing triple digits, and the AWS backlog stands at $496 billion. Advertising revenue of $19.81 billion grew 26%. CEO Andy Jassy told the call that "AWS is booming right now" and management now believes AWS "will be at least double" the few-hundred-billion revenue base they long modeled.
Risk to watch: free cash flow has turned negative on a TTM basis at -$7.6 billion after $53.1 billion of cash capex in Q2 alone. Investors are underwriting the 2027 capacity doubling before it monetizes, and at 36x earnings, the multiple leaves little room for a demand air pocket.
What to Watch Next All three names are running the same playbook: absorb an unprecedented capex cycle, convert it into contracted cloud backlog, and monetize AI seats and tokens on top. The tell will be Q1 fiscal 2027 Azure guidance (Microsoft has already pointed to roughly 45% growth in constant currency), the trajectory of Google Cloud’s 82% run rate, and whether AWS holds its 18-quarter high in growth. If any of those cracks, the smart-money accumulation thesis needs re-underwriting. Until then, the setup keeps rewarding patience.
Contact [email protected] for any questions or corrections.
Key Takeaways Microsoft surpassed 30 million paid Copilot seats, with additions more than doubling sequentially.E7 adoption supports seat expansion and higher average revenue per user.Microsoft 365 Commercial seats grew 6% year over year, supporting cloud revenue growth. Microsoft (MSFT - Free Report) continues to strengthen its enterprise productivity franchise as adoption of Microsoft 365 Copilot expands across its commercial customer base. The opportunity is shifting beyond initial deployments. Broader seat adoption and deeper integration across enterprise workflows could support longer-term growth. It could also increase the stickiness of Microsoft 365 within organizations.
Premium SKU adoption is adding another growth avenue. Microsoft’s E7 offering combines Copilot, E5, Entra and Agent 365. Early adoption suggests growing interest in integrated AI and security capabilities. Hundreds of enterprise customers had purchased millions of E7 seats within two months of its launch. This supports both seat expansion and higher average revenue per user as customers move toward premium offerings.
Paid Microsoft 365 Copilot seats exceeded 30 million in the fourth quarter of fiscal 2026, while net paid seat additions more than doubled sequentially. Paid Microsoft 365 Commercial seats grew 6% year over year, indicating continued expansion of the installed base. Premium offerings, including Copilot, E5 and E7, also supported average revenue per user growth
However, lower average revenue per user from new frontline and small and medium-sized business seats could temper the near-term benefit from higher seat volumes. Still, continued Copilot adoption and premium SKU expansion could support Microsoft 365 Commercial cloud growth, with revenue growth expected to accelerate through fiscal 2027.
How MSFT Is Placed Against PeersMicrosoft faces competition from Alphabet (GOOGL - Free Report) and Salesforce (CRM - Free Report) in the enterprise AI productivity space. Alphabet continues to push Gemini integration across Google Workspace, targeting similar seat-based monetization among business customers. Salesforce has positioned Agentforce as its core enterprise AI agent offering, competing for budget allocated toward AI-driven workflow tools. While Alphabet benefits from broad Workspace penetration and Salesforce brings deep CRM integration, Microsoft's advantage lies in bundling Copilot across its existing Office and Windows installed base. This scale advantage, alongside E7 adoption, could help Microsoft sustain seat growth even as Alphabet and Salesforce intensify competitive positioning in enterprise AI tools.
MSFT’s Share Price Performance, Valuation & EstimatesMSFT shares have appreciated 2.5% in the year-to-date (YTD) period against the Zacks Computer – Software industry’s decline of 4.2%. The Zacks Computer and Technology sector has appreciated 19% in the same time frame.
MSFT’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MSFT stock appears overvalued, trading at a forward 12-month price/earnings ratio of 24.68X, higher than the industry’s 23.13X. MSFT has a Value Score of D.
MSFT’s Valuation
Image Source: Zacks Investment Research
Glenmede Trust Co. NA lessened its stake in Microsoft Corporation (NASDAQ: MSFT) by 1.1% in the first quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 1,541,064 shares of the software giant's stock after selling 17,299 shares during the period. Microsoft makes
Concorde Asset Management LLC cut its stake in Microsoft Corporation (NASDAQ:MSFT – Free Report) by 36.8% in the 1st quarter, according to its most recent disclosure with the SEC. The institutional investor owned 3,565 shares of the software giant’s stock after selling 2,075 shares during the period. Concorde Asset Management LLC’s holdings in Microsoft were worth $1,320,000 as of its most recent SEC filing.
Other institutional investors have also added to or reduced their stakes in the company. Vanguard Group Inc. lifted its stake in Microsoft by 2.3% in the fourth quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after purchasing an additional 15,955,898 shares during the last quarter. State Street Corp boosted its position in Microsoft by 2.1% during the fourth quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock valued at $148,060,557,000 after buying an additional 6,388,930 shares during the period. Geode Capital Management LLC grew its stake in shares of Microsoft by 1.1% during the fourth quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock valued at $88,056,019,000 after buying an additional 1,911,142 shares during the last quarter. Morgan Stanley increased its holdings in shares of Microsoft by 0.8% in the fourth quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock worth $58,624,690,000 after buying an additional 980,439 shares during the period. Finally, Norges Bank purchased a new position in shares of Microsoft in the fourth quarter worth about $50,664,631,000. Institutional investors own 71.13% of the company’s stock.
Microsoft Price Performance Shares of NASDAQ MSFT opened at $495.40 on Monday. Microsoft Corporation has a 1 year low of $349.20 and a 1 year high of $553.72. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The company’s 50-day moving average is $411.27 and its 200 day moving average is $408.06. The stock has a market capitalization of $3.68 trillion, a P/E ratio of 27.58, a P/E/G ratio of 1.59 and a beta of 1.10.
Microsoft (NASDAQ:MSFT – Get Free Report) last issued its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping the consensus estimate of $4.24 by $0.50. The business had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. Microsoft’s quarterly revenue was up 17.7% compared to the same quarter last year. During the same period last year, the business posted $3.65 earnings per share. On average, sell-side analysts expect that Microsoft Corporation will post 19.59 earnings per share for the current year.
Microsoft Announces Dividend The company also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio (DPR) is presently 20.27%.
Key Stories Impacting Microsoft Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Analysts continue to highlight Microsoft’s Azure expansion, accelerating Microsoft 365 Copilot adoption, and the company’s ability to sustain double-digit earnings growth. Microsoft’s latest quarter also exceeded expectations, with revenue of approximately $90 billion and earnings growth supported by Azure. Microsoft’s Cloud Gains Can Sustain Double-Digit Earnings Growth Positive Sentiment: JPMorgan raised its Microsoft price target to $625, citing stronger Copilot demand and accelerating infrastructure investment. Other analysts remain bullish, with a six-month median target near $540, reinforcing investor confidence in Microsoft’s long-term AI positioning. JPMorgan Raises Microsoft Price Target Positive Sentiment: Microsoft is combining its consumer and enterprise Copilot applications into a unified platform, potentially improving distribution, user engagement, and monetization as it competes with ChatGPT, Gemini, and Claude. Microsoft Unifies Copilot Applications Neutral Sentiment: Microsoft approved the first AI data-center deployment under its $9.7 billion agreement with IREN, supporting Azure capacity expansion. The deal improves supply visibility but also underscores Microsoft’s substantial capital requirements. IREN Delivers First AI Cloud Deployment Negative Sentiment: Investors remain concerned that Microsoft’s roughly $175 billion AI infrastructure spending plan could pressure free cash flow and cloud margins. A reported decline in cloud gross margin and higher data-center, chip, electricity, and labor costs raise questions about how much of the company’s large AI backlog will translate into profit. Microsoft’s AI Backlog and Profitability Concerns Negative Sentiment: Reports that Microsoft has closed at least 15 China offices and joint ventures add geopolitical and operational uncertainty, although Azure reportedly provides a profitable reason to retain a limited China presence. Microsoft Retreats in China Analyst Upgrades and Downgrades Several equities research analysts recently weighed in on MSFT shares. CLSA restated an “outperform” rating on shares of Microsoft in a report on Thursday, July 30th. Tigress Financial lifted their price target on Microsoft from $680.00 to $690.00 and gave the stock a “buy” rating in a research note on Wednesday, August 5th. Guggenheim reiterated a “buy” rating and issued a $586.00 price objective on shares of Microsoft in a research report on Monday, July 27th. Argus dropped their price objective on Microsoft from $620.00 to $510.00 and set a “buy” rating for the company in a research note on Friday, July 10th. Finally, China Renaissance cut their target price on shares of Microsoft from $630.00 to $550.00 and set a “buy” rating on the stock in a report on Monday, May 4th. Forty-two research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and an average price target of $560.27.
Check Out Our Latest Research Report on MSFT
Insider Buying and Selling In other Microsoft news, CEO Judson Althoff sold 15,500 shares of the stock in a transaction on Monday, June 1st. The stock was sold at an average price of $460.99, for a total value of $7,145,345.00. Following the completion of the transaction, the chief executive officer owned 110,477 shares in the company, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, EVP Takeshi Numoto sold 4,810 shares of the stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the completion of the transaction, the executive vice president owned 42,677 shares of the company’s stock, valued at approximately $21,188,276.96. This trade represents a 10.13% decrease in their position. The SEC filing for this sale provides additional information. In the last 90 days, insiders sold 37,310 shares of company stock valued at $17,256,219. 0.03% of the stock is currently owned by company insiders.
About Microsoft (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
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Dala Group LLC purchased a new position in Microsoft Corporation (NASDAQ: MSFT) in the first quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The fund purchased 4,833 shares of the software giant's stock, valued at approximately $1,796,000. Microsoft comprises about 1.5% of Dala Group
Financial Solutions Advisory Group Inc. bought a new position in shares of Microsoft Corporation (NASDAQ: MSFT) in the undefined quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The institutional investor bought 10,576 shares of the software giant's stock, valued at approximately $3,915,000. A number
The chips are quite small and some can be held in the palm of a hand. They are fundamental to the development of artificial intelligence models – and the world’s biggest technology companies need vast numbers of them to keep ahead.
Microsoft is one of them. And, on paper, it seems to have a problem. A Guardian investigation has found an apparent discrepancy between what the company has said about its AI capacity – and the number of advanced AI chips it has in operation.
It is not a small shortfall either. Microsoft reportedly targeted having 1.8m AI chips installed in its datacentres around the globe by the end of 2024. Nearly two years on, in the middle of a $280bn (£208bn) expansion, the company has 2.2m AI chips installed, according to internal documents seen by the Guardian. This is less than half the number some experts had imagined.
Put simply, the global AI arms race requires a massive build-out of datacentres that run on extremely expensive chips. The apparent discrepancy over the chips suggests Microsoft’s newest datacentres may not be fully operational or, if they are, they do not have the chips they need.
Nvidia’s microchips are integral to the boom in datacentre development. Photograph: NurPhoto/Getty ImagesThis highlights something even more fundamental about charting the progress being made in the development of AI technologies. The chips that power AI are made by Nvidia, one of the two most valuable companies in the world. Its supply chain is one of the most tightly held secrets in the entire industry.
With almost no exceptions, Nvidia does not report how many of these chips it sells or to whom. Its clients, the world’s biggest tech companies, in turn do not reveal how many they have. Without this information, it is very hard for anyone to know whether AI is booming or not.
Microsoft: a power vacuum?In the past two years, Microsoft says it has built AI infrastructure at breakneck speed. Its chief executive, Satya Nadella, said last year it would double its global datacentre footprint by mid-2027. Since 2022 it has ploughed roughly $280bn into the land, buildings and computational infrastructure to build AI. This includes more than $41bn in the past quarter.
But it is difficult to estimate how many datacentres Microsoft has built with this money.
It is possible to assess the progress that the company is making by looking at what it has announced publicly, with a particular eye on the power it needs. Datacentres need electricity, so one way of estimating how many datacentres are operational is to add up the energy Microsoft has at its disposal – its AI capacity.
Microsoft’s own claims, set out in annual reports and quarterly earnings, suggest it has added 5GW of datacentre capacity over the past two years as part of its AI build-out. It says it now has hundreds of datacentres on five continents.
Five gigawatts is a dizzying amount of energy – it is four times the size of the largest datacentre park in Europe. But Microsoft’s total capacity should be even greater than this; it has been building AI infrastructure since 2022. How much greater is an open question.
The hardware inside a Microsoft datacentre campus. Photograph: Audrey Richardson/ReutersIn an investor presentation from 2024, Microsoft reportedly claimed to have 5GW of datacentre capacity already installed. That would suggest it could now have a total of 10GW of capacity. It is unclear if all of these are AI datacentres – some could be for other cloud services. But Microsoft’s own statements indicate that the overwhelming focus of its capital expenditures in recent years has been to build AI infrastructure.
Ten gigawatts of AI datacentres would suggest Microsoft should have roughly 6.4m graphics processing units (GPUs). Shaolei Ren, a professor at the University of California, Riverside, said Microsoft’s sustainability reports, which contain figures for its electricity usage and are published separately from its financials, painted a different picture.
He said these reports suggest Microsoft’s AI capacity in 2024 was probably closer to 1.2GW. But even this lower figure would indicate Microsoft would need roughly 4m AI chips – if it added 5GW of AI datacentres in the past two years.
“According to their own metrics, Microsoft could be correct. But it isn’t clear what they mean when they say they have added datacentre capacity. They are giving insufficient context,” Ren said. “The sustainability reports are audited by a third party. They have more credibility than announcements.”
An analyst who specialises in Nvidia said they thought Microsoft would have more chips, given its public statements. “They’re low to me. They’re less than I expected Microsoft would have,” they said.
Microsoft insisted the Guardian’s calculations were based on incorrect information. It did not offer any insight as to which of the Guardian’s numbers were incorrect or why. What is clear is that Microsoft’s build-out of AI capacity appears to be going far more slowly than its annual reports may suggest.
Ren said: “It may be plausible to secure or announce 1GW of power capacity within a single quarter on paper. But bringing that capacity online and actually using it for computing within the same quarter would be far more difficult.”
Sources within Microsoft say the company’s total number of AI chips has “barely moved” over the past year.
Some of the apparent discrepancy may be explained by Microsoft’s tie-up with OpenAI. The exact terms of their commercial partnership are not public, but this unit may account for some of Microsoft’s datacentre deployments, which would not be in the documents the Guardian has seen.
A Microsoft datacentre in Middenmeer, the Netherlands. Photograph: ANP/Shutterstock‘You may have a bunch of chips … you can’t plug in’There is another factor: some of Microsoft’s big projects appear to be far from operational.
Take Microsoft’s largest AI development in the US, a pair of datacentres in Wisconsin and Georgia called Fairwater. In April, Nadella, Microsoft’s chief executive, said the Fairwater project in Wisconsin “is going live”.
Satellite footage of the building from Epoch AI, however, appears to indicate only part of it is operational. In May, Microsoft admitted to a Wisconsin newspaper that Fairwater was not yet online.
This is very common, said Ren. Initially it was a multi-gigawatt, multibillion-dollar investment. Three years later, only 300MW has been built.
Satya Nadella said last year Microsoft would double its global datacentre footprint by mid-2027. Photograph: Jeff Chiu/APThe internal document also indicates Microsoft has fewer of Nvidia’s newest model of chip, the Blackwell, than one might expect given Nvidia’s public announcements. Last March, Nvidia’s chief executive, Jensen Huang, said orders for Blackwells from Nvidia’s top four customers – widely thought to be Amazon, Oracle, Microsoft and Google – amounted to 3.6m.
There was no breakdown given for this figure, but Microsoft has historically been one of Nvidia’s largest customers. If this was still the case, that should put Microsoft’s total Blackwell holdings at somewhere close to 1m chips. In fact, it has less than half of this amount installed.
Where are the chips, if not in the datacentres?Nvidia’s balance sheets appear to indicate that it has sold a great many chips; it posted a revenue of $215.9bn in February. Has Microsoft bought these but not installed them? How many, and are all of them in its possession?
Nadella appeared to gesture at this question on a podcast late last year called All Things AI, where he talked about Microsoft’s datacentre build-out. The biggest problem, he said, was electrical power and building datacentres close enough to where power was located.
“If you can’t do that, you may actually have a bunch of chips sitting in inventory that I can’t plug in. In fact, that is my problem today. It’s not a supply issue of chips. It’s actually the fact that I don’t have warm shells to plug into.”
A Microsoft spokesperson said: “Over several decades, Microsoft has built a global infrastructure to meet rapidly growing customer demand for cloud and AI services. Our datacentres combine custom silicon, AMD, Intel and Nvidia chips across multiple generations with the networking, storage and systems infrastructure required to operate at scale.
“Microsoft does not report on the volume of specific chips in its AI infrastructure. The estimates the Guardian has shared with us are inaccurate, drawing the wrong conclusions from incorrect assumptions.”
Nvidia did not respond to a request for comment.
How to calculate numbers of chips from a company’s ‘AI capacity’The world’s biggest technology companies give figures for their AI capacity in terms of power: gigawatts. One gigawatt powers between 700,000 and 1m homes. Meta says its controversial Hyperion datacentre in Louisiana will have 5GW of capacity. The UK company DataVita is planning a 1GW datacentre in Lanarkshire.
Converting these figures into chips means calculating how many chips can be run with that amount of power. The Guardian used the following methodology, reviewing these calculations with Abdeltawab Hendawi, a professor at the University of Rhode Island, and Ren.
To get a very broad approximation of how many chips there are in a datacentre, you could divide the power usage of that datacentre by the power usage of an AI chip – for example, an H100. A single H100 uses 700W. If Microsoft has 10GW of capacity, dividing this by 700 watts suggests it should have 12m chips.
H100s make up the bulk of the chips described in the internal document. It also indicates that Microsoft has A100s, which use less power, and Blackwells, which use more.
But this approximation does not account for several factors. First, datacentres have cooling systems and other equipment, which also use electricity. Ren estimates that in a given AI datacentre, 80% of the electricity goes to computer chips. This is roughly in accordance with figures from the International Energy Agency, although the number depends on the efficiency of the datacentre. Eighty per cent of 10GW would suggest 8GW may actually be in use.
This is slightly lower than Microsoft’s own figures for its datacentre efficiency, which appear in a 2024 sustainability report and suggest that 89% of the electricity in its new datacentres powers the IT systems, with an 11% overhead.
Second, not all the chips in a datacentre are AI chips. Instead, AI chips are fitted on to server racks with other computer chips, such as memory chips, that help them run calculations. A server with eight H100 GPUs uses a maximum of about 10kW of power.
Dividing 8GW by 10kW gives 800,000 servers, or 6.4m chips.
This is a conservative estimate, as in practice companies such as Microsoft oversubscribe their power capacity to some extent – putting more chips in a datacentre than can be supported by their IT capacity, said Ren.
BankChampaign National Association purchased a new position in Microsoft Corporation (NASDAQ: MSFT) in the first quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor purchased 3,847 shares of the software giant's stock, valued at approximately $1,424,000. Microsoft accounts for about 1.4% of BankChampaign
Boothe Investment Group Inc. purchased a new stake in Microsoft Corporation (NASDAQ: MSFT) in the first quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor purchased 15,635 shares of the software giant's stock, valued at approximately $5,788,000. Microsoft comprises 1.9%
Evolutionary Tree Capital Management LLC lowered its position in Microsoft Corporation (NASDAQ: MSFT) by 58.9% during the undefined quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 6,844 shares of the software giant's stock after selling 9,810 shares during the quarter. Microsoft
FinArc Investments Inc. acquired a new position in shares of Microsoft Corporation (NASDAQ: MSFT) in the first quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor acquired 7,106 shares of the software giant's stock, valued at approximately $2,630,000. Microsoft makes up approximately 2.5% of FinArc Investments
CCM Investment Advisers LLC lifted its holdings in Microsoft Corporation (NASDAQ:MSFT – Free Report) by 5.6% during the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 67,596 shares of the software giant’s stock after buying an additional 3,604 shares during the quarter. Microsoft makes up about 2.4% of CCM Investment Advisers LLC’s holdings, making the stock its 10th biggest holding. CCM Investment Advisers LLC’s holdings in Microsoft were worth $25,022,000 at the end of the most recent quarter.
Several other institutional investors also recently modified their holdings of MSFT. Norges Bank purchased a new position in shares of Microsoft during the fourth quarter valued at approximately $50,664,631,000. Auto Owners Insurance Co boosted its position in shares of Microsoft by 56,160.8% in the 4th quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant’s stock worth $29,073,486,000 after purchasing an additional 60,009,531 shares in the last quarter. Nuveen LLC purchased a new stake in shares of Microsoft in the 1st quarter worth approximately $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of Microsoft by 500.0% in the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant’s stock worth $30,840,432,000 after buying an additional 49,618,571 shares during the last quarter. Finally, Laurel Wealth Advisors LLC increased its position in Microsoft by 49,640.3% during the 2nd quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant’s stock valued at $14,905,904,000 after buying an additional 29,906,791 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors.
Microsoft Stock Down 0.3% MSFT stock opened at $495.40 on Friday. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The stock has a market capitalization of $3.68 trillion, a P/E ratio of 27.58, a P/E/G ratio of 1.60 and a beta of 1.11. The business has a fifty day moving average price of $411.27 and a 200-day moving average price of $408.50. Microsoft Corporation has a 1-year low of $349.20 and a 1-year high of $553.72.
Microsoft (NASDAQ:MSFT – Get Free Report) last issued its earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.24 by $0.50. The company had revenue of $90.01 billion for the quarter, compared to analysts’ expectations of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The firm’s quarterly revenue was up 17.7% on a year-over-year basis. During the same quarter last year, the company posted $3.65 earnings per share. Equities analysts forecast that Microsoft Corporation will post 19.59 earnings per share for the current fiscal year.
Microsoft Announces Dividend The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a $0.91 dividend. This represents a $3.64 annualized dividend and a dividend yield of 0.7%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio is 20.27%.
Analysts Set New Price Targets A number of brokerages have issued reports on MSFT. Jefferies Financial Group reiterated a “buy” rating on shares of Microsoft in a research note on Monday, May 4th. Weiss Ratings reissued a “hold (c)” rating on shares of Microsoft in a research note on Monday, July 6th. Dbs Bank reduced their price target on Microsoft from $678.00 to $573.00 in a report on Thursday, May 7th. Wells Fargo & Company lifted their price target on Microsoft from $650.00 to $700.00 and gave the stock an “overweight” rating in a research report on Wednesday. Finally, Rothschild & Co Redburn dropped their price target on shares of Microsoft from $450.00 to $400.00 and set a “neutral” rating on the stock in a research note on Thursday, April 23rd. Forty-two research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company’s stock. According to MarketBeat, Microsoft has a consensus rating of “Moderate Buy” and an average target price of $560.27.
Get Our Latest Stock Analysis on MSFT
Insider Activity at Microsoft In other Microsoft news, EVP Takeshi Numoto sold 4,810 shares of the company’s stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the completion of the sale, the executive vice president directly owned 42,677 shares of the company’s stock, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CEO Judson Althoff sold 15,500 shares of the company’s stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the sale, the chief executive officer directly owned 110,477 shares of the company’s stock, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 37,310 shares of company stock worth $17,256,219 in the last quarter. Company insiders own 0.03% of the company’s stock.
Key Stories Impacting Microsoft Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Analysts continue to highlight Microsoft’s Azure expansion, accelerating Microsoft 365 Copilot adoption, and the company’s ability to sustain double-digit earnings growth. Microsoft’s latest quarter also exceeded expectations, with revenue of approximately $90 billion and earnings growth supported by Azure. Microsoft’s Cloud Gains Can Sustain Double-Digit Earnings Growth Positive Sentiment: JPMorgan raised its Microsoft price target to $625, citing stronger Copilot demand and accelerating infrastructure investment. Other analysts remain bullish, with a six-month median target near $540, reinforcing investor confidence in Microsoft’s long-term AI positioning. JPMorgan Raises Microsoft Price Target Positive Sentiment: Microsoft is combining its consumer and enterprise Copilot applications into a unified platform, potentially improving distribution, user engagement, and monetization as it competes with ChatGPT, Gemini, and Claude. Microsoft Unifies Copilot Applications Neutral Sentiment: Microsoft approved the first AI data-center deployment under its $9.7 billion agreement with IREN, supporting Azure capacity expansion. The deal improves supply visibility but also underscores Microsoft’s substantial capital requirements. IREN Delivers First AI Cloud Deployment Negative Sentiment: Investors remain concerned that Microsoft’s roughly $175 billion AI infrastructure spending plan could pressure free cash flow and cloud margins. A reported decline in cloud gross margin and higher data-center, chip, electricity, and labor costs raise questions about how much of the company’s large AI backlog will translate into profit. Microsoft’s AI Backlog and Profitability Concerns Negative Sentiment: Reports that Microsoft has closed at least 15 China offices and joint ventures add geopolitical and operational uncertainty, although Azure reportedly provides a profitable reason to retain a limited China presence. Microsoft Retreats in China Microsoft Company Profile (Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
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Compass Capital Management Inc. raised its stake in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 2.6% in the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The fund owned 171,001 shares of the software giant’s stock after purchasing an additional 4,292 shares during the quarter. Microsoft accounts for about 3.7% of Compass Capital Management Inc.’s holdings, making the stock its 4th biggest holding. Compass Capital Management Inc.’s holdings in Microsoft were worth $63,300,000 as of its most recent filing with the Securities and Exchange Commission (SEC).
A number of other hedge funds and other institutional investors have also bought and sold shares of the stock. Vanguard Group Inc. boosted its holdings in shares of Microsoft by 2.3% in the 4th quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after purchasing an additional 15,955,898 shares in the last quarter. State Street Corp raised its holdings in shares of Microsoft by 2.1% during the 4th quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock valued at $148,060,557,000 after buying an additional 6,388,930 shares in the last quarter. Geode Capital Management LLC raised its holdings in shares of Microsoft by 1.1% during the 4th quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock valued at $88,056,019,000 after buying an additional 1,911,142 shares in the last quarter. Morgan Stanley lifted its position in Microsoft by 0.8% in the 4th quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock worth $58,624,690,000 after buying an additional 980,439 shares during the last quarter. Finally, Norges Bank bought a new stake in Microsoft in the 4th quarter worth approximately $50,664,631,000. Hedge funds and other institutional investors own 71.13% of the company’s stock.
Insiders Place Their Bets
In other Microsoft news, CEO Judson Althoff sold 10,000 shares of the stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the completion of the sale, the chief executive officer owned 100,447 shares of the company’s stock, valued at $49,007,086.83. This represents a 9.05% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at the SEC website. Also, EVP Takeshi Numoto sold 4,810 shares of the firm’s stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the completion of the sale, the executive vice president directly owned 42,677 shares in the company, valued at approximately $21,188,276.96. This trade represents a 10.13% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 37,310 shares of company stock valued at $17,256,219 over the last quarter. 0.03% of the stock is currently owned by company insiders.
Wall Street Analyst Weigh In
A number of brokerages have commented on MSFT. Wedbush reiterated an “outperform” rating and set a $575.00 price target on shares of Microsoft in a research report on Wednesday, May 13th. Sanford C. Bernstein set a $660.00 price target on shares of Microsoft in a research note on Monday, August 10th. Barclays lowered their price objective on shares of Microsoft from $545.00 to $512.00 and set an “overweight” rating for the company in a report on Thursday, July 30th. Cantor Fitzgerald upped their price objective on shares of Microsoft from $502.00 to $522.00 and gave the company an “overweight” rating in a research note on Monday, July 27th. Finally, CLSA reaffirmed an “outperform” rating on shares of Microsoft in a report on Thursday, July 30th. Forty-two equities research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus target price of $560.27.
Check Out Our Latest Analysis on Microsoft
Microsoft Price Performance
Shares of Microsoft stock opened at $495.40 on Friday. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The business’s 50 day simple moving average is $411.27 and its two-hundred day simple moving average is $408.50. The stock has a market capitalization of $3.68 trillion, a P/E ratio of 27.58, a price-to-earnings-growth ratio of 1.60 and a beta of 1.11. Microsoft Corporation has a one year low of $349.20 and a one year high of $553.72.
Microsoft (NASDAQ:MSFT – Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, beating the consensus estimate of $4.24 by $0.50. The firm had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The business’s revenue was up 17.7% on a year-over-year basis. During the same quarter in the previous year, the company posted $3.65 earnings per share. Analysts forecast that Microsoft Corporation will post 19.59 EPS for the current year.
Microsoft Announces Dividend
The company also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be issued a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio is currently 20.27%.
Key Stories Impacting Microsoft
Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Analysts continue to highlight Microsoft’s Azure expansion, accelerating Microsoft 365 Copilot adoption, and the company’s ability to sustain double-digit earnings growth. Microsoft’s latest quarter also exceeded expectations, with revenue of approximately $90 billion and earnings growth supported by Azure. Microsoft’s Cloud Gains Can Sustain Double-Digit Earnings Growth
Positive Sentiment: JPMorgan raised its Microsoft price target to $625, citing stronger Copilot demand and accelerating infrastructure investment. Other analysts remain bullish, with a six-month median target near $540, reinforcing investor confidence in Microsoft’s long-term AI positioning. JPMorgan Raises Microsoft Price Target
Positive Sentiment: Microsoft is combining its consumer and enterprise Copilot applications into a unified platform, potentially improving distribution, user engagement, and monetization as it competes with ChatGPT, Gemini, and Claude. Microsoft Unifies Copilot Applications
Neutral Sentiment: Microsoft approved the first AI data-center deployment under its $9.7 billion agreement with IREN, supporting Azure capacity expansion. The deal improves supply visibility but also underscores Microsoft’s substantial capital requirements. IREN Delivers First AI Cloud Deployment
Negative Sentiment: Investors remain concerned that Microsoft’s roughly $175 billion AI infrastructure spending plan could pressure free cash flow and cloud margins. A reported decline in cloud gross margin and higher data-center, chip, electricity, and labor costs raise questions about how much of the company’s large AI backlog will translate into profit. Microsoft’s AI Backlog and Profitability Concerns
Negative Sentiment: Reports that Microsoft has closed at least 15 China offices and joint ventures add geopolitical and operational uncertainty, although Azure reportedly provides a profitable reason to retain a limited China presence. Microsoft Retreats in China
About Microsoft
(Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
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Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT – Free Report).
Receive News & Ratings for Microsoft Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Microsoft and related companies with MarketBeat.com's FREE daily email newsletter.
Essential Partners LLC boosted its holdings in shares of Microsoft Corporation (NASDAQ:MSFT – Free Report) by 119.9% during the 1st quarter, according to its most recent 13F filing with the SEC. The fund owned 5,289 shares of the software giant’s stock after purchasing an additional 2,884 shares during the period. Microsoft makes up 0.7% of Essential Partners LLC’s investment portfolio, making the stock its 24th largest holding. Essential Partners LLC’s holdings in Microsoft were worth $1,958,000 as of its most recent SEC filing.
A number of other institutional investors and hedge funds have also made changes to their positions in MSFT. Markel Group Inc. raised its holdings in Microsoft by 0.4% in the 1st quarter. Markel Group Inc. now owns 537,630 shares of the software giant’s stock valued at $199,014,000 after acquiring an additional 1,950 shares during the last quarter. Bessemer Group Inc. grew its holdings in Microsoft by 8.4% in the 1st quarter. Bessemer Group Inc. now owns 6,921,677 shares of the software giant’s stock valued at $2,562,197,000 after buying an additional 537,634 shares during the period. Taylor Securities Services Inc. purchased a new stake in Microsoft in the 4th quarter valued at about $2,616,000. Werba Rubin Papier Wealth Management lifted its holdings in shares of Microsoft by 15.7% during the 4th quarter. Werba Rubin Papier Wealth Management now owns 12,492 shares of the software giant’s stock worth $6,041,000 after acquiring an additional 1,698 shares during the period. Finally, Harel Insurance Investments & Financial Services Ltd. boosted its position in shares of Microsoft by 138.8% in the first quarter. Harel Insurance Investments & Financial Services Ltd. now owns 1,356,359 shares of the software giant’s stock worth $502,077,000 after acquiring an additional 788,297 shares during the last quarter. 71.13% of the stock is owned by hedge funds and other institutional investors.
Microsoft Trading Down 0.3%
NASDAQ MSFT opened at $495.40 on Friday. The stock has a market cap of $3.68 trillion, a P/E ratio of 27.58, a PEG ratio of 1.60 and a beta of 1.11. The company’s fifty day simple moving average is $411.27 and its 200-day simple moving average is $408.50. The company has a current ratio of 1.23, a quick ratio of 1.22 and a debt-to-equity ratio of 0.07. Microsoft Corporation has a 52 week low of $349.20 and a 52 week high of $553.72.
Microsoft (NASDAQ:MSFT – Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The business had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. During the same period last year, the business earned $3.65 EPS. The business’s revenue was up 17.7% on a year-over-year basis. Equities research analysts predict that Microsoft Corporation will post 19.59 EPS for the current fiscal year.
Microsoft Announces Dividend
The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. The ex-dividend date is Thursday, August 20th. This represents a $3.64 annualized dividend and a dividend yield of 0.7%. Microsoft’s dividend payout ratio (DPR) is currently 20.27%.
Microsoft News Roundup
Here are the key news stories impacting Microsoft this week:
Positive Sentiment: Analysts continue to highlight Microsoft’s Azure expansion, accelerating Microsoft 365 Copilot adoption, and the company’s ability to sustain double-digit earnings growth. Microsoft’s latest quarter also exceeded expectations, with revenue of approximately $90 billion and earnings growth supported by Azure. Microsoft’s Cloud Gains Can Sustain Double-Digit Earnings Growth
Positive Sentiment: JPMorgan raised its Microsoft price target to $625, citing stronger Copilot demand and accelerating infrastructure investment. Other analysts remain bullish, with a six-month median target near $540, reinforcing investor confidence in Microsoft’s long-term AI positioning. JPMorgan Raises Microsoft Price Target
Positive Sentiment: Microsoft is combining its consumer and enterprise Copilot applications into a unified platform, potentially improving distribution, user engagement, and monetization as it competes with ChatGPT, Gemini, and Claude. Microsoft Unifies Copilot Applications
Neutral Sentiment: Microsoft approved the first AI data-center deployment under its $9.7 billion agreement with IREN, supporting Azure capacity expansion. The deal improves supply visibility but also underscores Microsoft’s substantial capital requirements. IREN Delivers First AI Cloud Deployment
Negative Sentiment: Investors remain concerned that Microsoft’s roughly $175 billion AI infrastructure spending plan could pressure free cash flow and cloud margins. A reported decline in cloud gross margin and higher data-center, chip, electricity, and labor costs raise questions about how much of the company’s large AI backlog will translate into profit. Microsoft’s AI Backlog and Profitability Concerns
Negative Sentiment: Reports that Microsoft has closed at least 15 China offices and joint ventures add geopolitical and operational uncertainty, although Azure reportedly provides a profitable reason to retain a limited China presence. Microsoft Retreats in China
Wall Street Analysts Forecast Growth
A number of equities analysts have weighed in on MSFT shares. Rothschild & Co Redburn cut their price target on shares of Microsoft from $450.00 to $400.00 and set a “neutral” rating on the stock in a research note on Thursday, April 23rd. Mizuho decreased their target price on Microsoft from $515.00 to $490.00 and set an “outperform” rating for the company in a report on Wednesday, July 15th. China Renaissance cut their price target on shares of Microsoft from $630.00 to $550.00 and set a “buy” rating on the stock in a report on Monday, May 4th. Sanford C. Bernstein set a $660.00 price objective on shares of Microsoft in a research report on Monday, August 10th. Finally, UBS Group set a $525.00 target price on shares of Microsoft in a report on Thursday, July 30th. Forty-two equities research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company’s stock. According to data from MarketBeat, Microsoft has a consensus rating of “Moderate Buy” and a consensus target price of $560.27.
Get Our Latest Stock Report on MSFT
Insider Transactions at Microsoft
In related news, CEO Judson Althoff sold 10,000 shares of the business’s stock in a transaction dated Wednesday, August 5th. The stock was sold at an average price of $487.89, for a total value of $4,878,900.00. Following the transaction, the chief executive officer owned 100,447 shares in the company, valued at approximately $49,007,086.83. The trade was a 9.05% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, EVP Takeshi Numoto sold 4,810 shares of the stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total value of $2,388,068.80. Following the completion of the transaction, the executive vice president directly owned 42,677 shares of the company’s stock, valued at $21,188,276.96. This represents a 10.13% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders have sold 37,310 shares of company stock worth $17,256,219. Corporate insiders own 0.03% of the company’s stock.
About Microsoft
(Free Report)
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).
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Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT – Free Report).
Receive News & Ratings for Microsoft Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Microsoft and related companies with MarketBeat.com's FREE daily email newsletter.
It had been a difficult year for shareholders of Microsoft (MSFT -0.30%), who saw the stock grind lower throughout 2026. Then, fourth-quarter earnings (fiscal year 2026) happened, and shares shot up 18% in a week, a remarkable move for a stock worth over $3 trillion.
And just like that, Microsoft's stock is positive for the year. Months of anguish have fallen to the wayside. Perhaps the best news yet, it's not too late to buy the stock. Here's what you need to know.
Image source: The Motley Fool.
Microsoft's Azure and AI continue to roll on
The first question is naturally: why did Microsoft surge on Q4 earnings? Investors went into earnings laser-focused on Microsoft's AI progress and apparently came away impressed.
Revenue grew by 18% year over year to $90 billion for the quarter, and net income soared 31% versus the prior year. Azure is the primary engine driving this, with 43% growth and topping $100 billion in annual revenue for the first time.
Importantly, Microsoft's AI strategy is progressing.
CEO Satya Nadella noted that Microsoft 365 Copilot has surpassed 30 million paid seats, an encouraging sign that the company's infamous stickiness with enterprises is bearing fruit once again. Nadella also emphasized that AI demand continues to outpace supply, despite the ongoing investments into data centers and other infrastructure.
One of the world's best tech companies still trades at a reasonable price
Microsoft's hefty AI investments have been a legitimate concern, and the stock's slide has much to do with questions regarding whether the company can generate a sufficient return on all that spending.
Nadella has repositioned Microsoft as a more cost-effective AI provider, leaning harder into its own silicon and frontier models. This seems to be resonating with customers as the market raises concerns over how expensive some of these cutting-edge frontier models can be to wield at scale.
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Prior to earnings, Microsoft's stock was sitting there at roughly 19 times forward earnings estimates. That's a modest valuation for arguably the world's most prominent technology company. In that light, it's not a shock that a strong quarter sprung the stock.
Better yet, the stock is still very appealing for long-term investors at its current price. Shares now trade at a more expensive forward P/E ratio of 25. That said, analysts do expect Microsoft to grow earnings by an average of 15% to 16% annually over the next three to five years. It's hard to dismiss those estimates after net income just jumped 31% in the most recent quarter.
As long as Microsoft remains competitive in AI, and that seems like a safe bet thanks to Azure, the stock has a good shot at generating healthy returns from its current price over the next five years.
Plug Power (PLUG +0.87%) recently tested a backup power system in collaboration with Microsoft. The move comes amid hyperscalers' ever-increasing appetite for energy, and tech giants are exploring every possible avenue -- from gas turbines to hydrogen fuel cells -- to meet their energy needs.
CEO Jose Luis Crespo told investors this venture doesn't signal a fundamental shift in the company's strategy. Instead, Plug Power continues to focus on its core operations while reeling in expenses as it looks to become profitable.
Here's what investors need to know about Plug Power and where things could go from here.
Image source: Plug Power.
Microsoft put Plug Power's hydrogen fuel cells to the test In July, Plug Power announced it had entered into a technical collaboration with Microsoft to test whether its proton exchange membrane hydrogen fuel cells could be used at scale. The company delivered a 3-megawatt (MW) backup power system prototype capable of generating enough energy to replace a standard diesel generator.
The unit was built and housed in two 40-foot shipping containers. During testing, these fuel cells responded to simulated power grid outages, ramping up in seconds and using hydrogen as fuel, which emits only water vapor and heat.
The move tested Plug's hydrogen fuel cells in a data center environment and comes as the company explores whether its product could relieve grid strain from heavy electrical loads. Beyond testing, the company is working with Stream U.S. Data Centers to explore opportunities to deploy Plug Power's products in the data center industry.
Plug is undergoing a massive transformation and restructuring, and the data center move isn't a real pivot for the company. Its recent transactions are centered on asset monetization rather than on massive capital expenditures to open up new revenue streams. For example, it agreed to sell land and 164 MW of grid interconnection assets to Stream for up to $76.5 million.
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Plug's focus remains on becoming profitable Plug remains committed to Project Quantum Leap, where it will focus on its core businesses and reducing costs as it looks to become profitable for the first time in a quarter century. The company continues to execute on its three lines of business: material handling (through partnerships with retailers Walmart and Amazon); electrolyzers; and hydrogen fuel.
The company aims to achieve profitability across its existing segments; reach positive earnings before interest, taxes, depreciation, and amortization (EBITDA) by the fourth quarter of this year; and be profitable by 2028. For that reason, the company isn't looking to deploy significant capital to pursue another growth avenue. After all, that's what it has done throughout its history, and that's why it has an accumulated deficit of over $8.6 billion.
What investors should watch for Plug Power's collaboration with Microsoft demonstrated the technical viability of its fuel cells for data centers, but Plug Power's management team remains focused on its core business and achieving profitability before pouring capital into its next venture.
Plug Power has a long history of losing money and has been a painful stock for long-term investors amid massive cash burn and share dilution. While I wouldn't buy the stock on this news, it's worth keeping an eye on it in the coming quarters to see whether management is achieving its stated goals and how it plans to handle data center deals going forward.
Amazon (AMZN -0.94%) and Microsoft (MSFT -0.30%) are two of the biggest names in artificial intelligence (AI). Both of these companies have taken a similar path, choosing to integrate AI into their own products but utilize other providers' models instead of creating their own. They each also have a thriving cloud computing business, benefiting from rising AI workloads.
But which one of these two makes for the better buy? Let's take a look at the fourth- and fifth-largest companies in the world, and see which makes the most sense for your investment dollars.
Image source: Getty Images.
Both companies have a wide-ranging business
Microsoft's business is quite broad, ranging from business productivity software to gaming hardware and software to cloud computing. Microsoft has an iron grip in many of the industries that it's in and a massive number of clients that cannot afford to cut Microsoft's software even if times get bad. This makes Microsoft a pretty safe business to invest in, as it will likely be OK regardless of economic conditions.
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Amazon is in a similar boat, as its commerce business has become the most popular online shopping destination, and it has countless devoted clients that utilize its services every day.
Both Microsoft and Amazon have rock-solid cloud computing businesses too that are thriving in the AI build-out, and each of them is spending hundreds of billions of dollars to increase capacity to meet demand.
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While each business has its ups and downs, nothing points to Microsoft's or Amazon's base business being better than the other. As a result, I'm scoring this category as a tie.
Winner: Tie.
Both companies are growing at a similar pace
From a revenue growth standpoint, Microsoft has long enjoyed a lead over Amazon, but that changed during the most recent quarter.
MSFT Revenue (Quarterly YoY Growth) data by YCharts.
This boost is primarily because Amazon's cloud computing division, Amazon Web Services (AWS), is starting to really accelerate its growth, posting a 37% pace in the third quarter after several years of delivering growth in the 20% or so range. Considering we've just seen the tip of the iceberg in AI spending and cloud computing growth due to that spending, I wouldn't be surprised if Amazon maintains that lead moving forward.
Another item where Amazon has the edge is operating profit growth. Each company has significant investments in private AI companies (Microsoft is heavily invested in OpenAI, and Amazon is invested in Anthropic), which skews earnings results. Instead, I'll use operating profit growth, which doesn't include these gains. Amazon's lead starts to really open up here, mainly because of cloud computing's higher-margin profile than its base commerce business.
MSFT Operating Income (Quarterly YoY Growth) data by YCharts
This cements Amazon's win in the growth category.
Winner: Amazon.
Microsoft is the cheaper stock by one measure
I'll value the stock using their operating profits for the same reason that I looked at operating income growth versus earnings-per-share growth.
MSFT Operating PE Ratio data by YCharts.
Microsoft stock is far cheaper from this perspective, but that makes sense considering Amazon's growth rate, which deserves a premium.
If we look at forward earnings projections, that filters out some of the growth associated with past gains from rising investments. From this perspective, Amazon actually looks cheaper.
MSFT PE Ratio (Forward) data by YCharts.
Amazon's superior profit growth rate keeps pushing it to the top, so I think it's pretty easy to declare Amazon the winner both in this category and overall.
Winner: Amazon.
Does that mean you need to go out and sell all of your Microsoft shares? Absolutely not. I think Microsoft is still a great investment with plenty of upside. However, with AWS set to grow much faster than it has in the past, Amazon looks like it has more upside in the near term.
