Quick Read – Microsoft shed 22% over the past year despite four straight earnings beats, as AI capex fears drive a rare contrarian entry. – MSFT’s $627 billion contracted backlog, up 99% year over year, backs management’s FY27 guide for double-digit revenue and operating income…
owth. – OpenAI losses widened to $3.1 billion while capex surged 84%, and the bull thesis breaks if Azure growth falls below the mid-30s. – At $390, Microsoft (NASDAQ:MSFT) looks compelling to contrarians. The AI capital spending panic dragging the stock lower looks more like a setup than a warning sign
The stock has shed roughly a fifth of its value over the past year despite four straight earnings beats, giving contrarians a rare opening on a business whose contracted backlog is nearly doubling. Microsoft sits at the center of enterprise AI adoption. Azure, Microsoft 365, and the restructured OpenAI partnership feed a single cloud franchise that produced $54.5 billion in Microsoft Cloud revenue last quarter, up 29% year over year.
Shares have derated hard, sliding from $552.51 at the Q4 FY25 filing to $390.34, a trajectory that maps almost perfectly to escalating quarterly capex. The Backlog Is Doing the Talking Commercial remaining performance obligations reached $627 billion, up 99% year over year. That is contracted revenue backed by signed customer commitments.