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$445.88
Market Capi
$3.2T
Growth-adj P/E (3-yr hist)i
3.1x
Growth-adj P/E (3-yr proj)i
1.0x
P/S 26Ei
9.6x
P/S 28Ei
7.0x
EV/EBIT 26Ei
20x
EV/EBIT 28Ei
15x
P/E 26Ei
25x
P/E 28Ei
19x
P/S 26Ei
9.6x
EV/EBIT 26Ei
20x
P/E 26Ei
25x
P/S 28Ei
7.0x
EV/EBIT 28Ei
15x
P/E 28Ei
19x
Revenue
2026E
329B
Gross Margini
69%
Hist. CAGRi
13%
Proj. CAGRi
17%
EBIT
2026E
154B
Op. Margini
46%
Hist. CAGRi
16%
Proj. CAGRi
18%
Net profit
2026E
129B
Net Margini
36%
Hist. CAGRi
12%
Proj. CAGRi
19%
Consensus Target
$561.56+26%
55 analysts covering
Net debti
$17B
Div. Yieldi
0.7%
Dilutioni
0.0%
Microsoft operates across three reportable segments that together generated $282 billion in revenue in FY2025. The company is structurally a cloud and software business, with consumer hardware (Surface, Xbox) as a distant third category.
Microsoft sells primarily to enterprise and public-sector customers globally, with the US representing roughly 51% of revenue. The commercial customer base spans virtually every industry vertical — financial services, healthcare, government, retail, and manufacturing. Azure competes in a hyperscale cloud market dominated by three players (AWS, Azure, Google Cloud), where contract cycles are long, switching costs are high, and revenue is increasingly consumption-driven. LinkedIn and Dynamics serve the SMB and mid-market alongside enterprise. The gaming and consumer segment is smaller and more cyclical, but Xbox Game Pass provides recurring subscription revenue.
Microsoft's primary moat is deep enterprise switching costs: organizations running Azure, Microsoft 365, Teams, and Dynamics are operationally embedded across IT, communications, and finance workflows simultaneously. No competing suite replicates this breadth. GitHub holds a near-monopoly among developers with over 100 million users, creating a pipeline into Azure consumption. At the productivity layer, 30+ years of Office penetration in enterprise workflows means Microsoft Copilot can embed AI into tools employees already use daily — a distribution advantage no AI-native startup can replicate without that installed base.
Nadella has been CEO since February 2014 and became Chairman in June 2021, giving him full control of both executive leadership and the board. His prior 22 years at Microsoft included running the company's cloud and enterprise group — the exact division he then transformed into Azure, the company's primary growth engine. His strategic bet on cloud-first, mobile-first, and more recently AI has tripled Microsoft's market cap across his tenure.
Hood has served as CFO since May 2013, making her one of the longest-tenured finance chiefs among large-cap US technology companies. She has been the architect of Microsoft's commercial contract structure, including the shift to multi-year enterprise agreements and the current wave of AI-inclusive licensing deals (M365 Copilot, E7). Her guidance track record is closely followed by Wall Street.
President since September 2015, Smith leads Microsoft's legal, government affairs, and policy functions globally. He has been the primary face of Microsoft's AI governance positions, its EU regulatory engagements, and the company's published AI safety principles. His influence on how Microsoft navigates antitrust scrutiny — particularly around OpenAI and the Activision acquisition — makes him strategically significant beyond a standard general counsel role.
Other key figures
David Rhew joined as Chief Technology Officer in August 2025, having previously led healthcare and AI initiatives; his appointment signals a deepening focus on vertical AI applications. Amy Hood and Nadella together hold the central levers of financial strategy and capital allocation, which — given the $190 billion capex commitment in 2026 — is the decision most consequential for shareholders over the next two years.
P/S Ratio
EV/EBIT
P/E Ratio
Revenue
CAGR (hist. 3-yr)i
0%
CAGR (proj. 3-yr)i
0%
EBIT
CAGR (hist. 3-yr)i
0%
CAGR (proj. 3-yr)i
0%
Net profit
CAGR (hist. 3-yr)i
0%
CAGR (proj. 3-yr)i
0%
Values in millions of USD.
Operating cashflow · Levered Free Cash Flow
Free Cash Flow
CAPEX
Values in millions of USD.
Margins
Rentability
Balance sheet
Values in millions of USD.
Liquidity ratios
Debt-to-Equity-Ratio
Revenue of $82.9 billion in Q3 FY2026 (quarter ended March 31, 2026) grew 18% year-over-year, beating the consensus estimate of roughly $81.4 billion. Diluted EPS came in at $4.27, up 23% YoY, ahead of the $4.07 consensus.
Azure and cloud services grew 40% year-over-year — above the guided 37–38% range and the clearest sign that AI infrastructure demand is absorbing capacity as it comes online. The Intelligent Cloud segment posted $34.7 billion in revenue, up 30%.
The AI business hit an annualized revenue run rate of $37 billion, up 123% YoY, with over 20 million paid Microsoft 365 Copilot commercial seats. Commercial remaining performance obligations surged 99% to $627 billion, signaling durable forward demand.
For Q4 FY2026, management guided total revenue of $86.7–87.8 billion and Azure growth of 39–40% in constant currency, citing loosening capacity constraints and expanding data center availability as key enablers.
On April 27, 2026, Microsoft and OpenAI announced an amended partnership agreement intended to simplify their commercial relationship and clarify terms as both companies scale their AI businesses independently.
In March 2026, Microsoft launched Microsoft 365 E7 (The Frontier Suite) and Copilot Cowork — an autonomous agent built in partnership with Anthropic capable of multi-step workflows. General availability of E7 and Microsoft Agent 365 followed on May 1, 2026.
Microsoft is reportedly in talks to acquire AI startup Inception (as of May 13, 2026), which would add diffusion-model expertise and lower-cost inference capabilities. No transaction has been finalized.
Microsoft raised its full-year capex outlook to approximately $190 billion for calendar 2026, partly driven by elevated memory component costs, with Q4 alone expected to exceed $40 billion.
Bulls anchor on the $627 billion commercial backlog and Azure's re-acceleration to 40% growth as evidence that enterprise AI spending is durable, not a one-cycle phenomenon. The 123% growth rate in AI annualized revenue suggests monetization of inference is happening faster than many expected.
Bears focus on free cash flow declining 22% year-over-year to $15.8 billion in Q3 as capex intensity compresses returns. The concern is that $190 billion in annual infrastructure spending will weigh on FCF for two to three years before AI revenue fully offsets it.
Competition is intensifying: Amazon secured a multi-billion-dollar OpenAI distribution deal, Google Cloud has scaled aggressively with the Gemini model family, and Oracle is winning large multi-year AI infrastructure contracts — each chipping at Azure's leadership narrative in different enterprise segments.
Consensusi
Buy
Average targeti
$561.56+26%
Highest targeti
$870.00+95%
Lowest targeti
$400.00-10%