Quick Read
-
Microsoft’s stock gained just 2% over the past year while net income grew 32%, creating a gap between share price and earnings growth.
-
Azure grew 48%, the commercial backlog surged 73% to $677B, and Copilot daily users rose over 5x year over year.
-
Unlike Amazon’s $42B free cash burn and Oracle’s negative $5.4B free cash flow, Microsoft returned $10.2B to shareholders in a single quarter.
-
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Microsoft didn’t make the cut. Enter your email to see the names that beat MSFT. The report is free. Enter your email and see if any of your stocks made the cut.
Microsoft (NASDAQ:MSFT) shows a widening gap between its share price and its operating results. The stock rose just 1.6% over the past year. Meanwhile, net income grew 32.01% in the latest quarter. The investment case depends on this gap between share performance and earnings growth.
Why I Keep Coming Back
Corporate AI runs on Microsoft’s plumbing. Companies rent Azure capacity, build agents in Foundry, and pay for Copilot through both seats and usage. Microsoft gets paid at every layer. When a business puts AI to work, the bill usually lands with Microsoft somewhere along the way.
Three Receipts Behind My Conviction
First, growth is speeding up even at a $3.87 trillion market cap. In the quarter ended Sept 30, 2026, revenue reached $92.28B, up 18.8%. Microsoft Cloud brought in $63.9B, up 30%, and Azure grew 48%. Copilot daily users rose over 5x year over year.
Second, the backlog. Commercial remaining performance obligations, meaning revenue customers have already signed contracts for, reached $677B, up 73%. Non-GAAP EPS came in at $4.89 against a $4.72 estimate. That extends a run where every quarter from Q3 25 through Q4 26 also beat estimates.
——
Free Report, Just Released
Why Didn’t MSFT Make The Top 10 List?
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
And MSFT didn’t make the cut!
The report is free, and you can see why we think each stock is a top investment today.
Enter Your Email and See the Ten →
——
Third, the valuation remains reasonable relative to profitability. The stock trades at 29 times trailing earnings and 26 times forward earnings, with a 46.78% operating margin and 34.04% return on equity. The yield stands at only 0.68%, but the quarterly dividend just rose to $0.98 from $0.91. Back in 2008 and 2009, it was $0.13. Debt/equity stands at 0.29, and interest coverage at 50.88x.
