Quick Read – MSFT’s $678 billion contracted backlog, equivalent to two years of sales, anchors Azure’s 43% growth rate with rare revenue visibility at just 25x earnings. – AAPL commands a premium multiple despite 16% revenue growth while MSFT grows 18% with a contracted backlog…
PL cannot match. – Full-year capex doubled to $116 billion while free cash flow fell 23%, making the thesis hinge on Azure staying above 30% growth. – Microsoft (NASDAQ:MSFT) at $451.10 screens as attractive on the fundamentals. The earnings surge that pushed shares up more than 15% matters less than what fiscal Q4 revealed about Microsoft’s cloud franchise durability at a moment the market had priced in AI capex fatigue
Microsoft runs three segments: Intelligent Cloud (Azure and server products), Productivity and Business Processes (Microsoft 365, LinkedIn, Dynamics), and More Personal Computing (Windows, Xbox). Cloud and AI now drive results. Azure crossed $100 billion in annual revenue this fiscal year while still growing 43% year over year.
That is the growth profile of a company one-tenth Microsoft’s size. Shares spent most of 2026 on the defensive. Even after the pop, MSFT trades below where it started the year, having lagged as investors questioned whether the $115.95 billion capex bill would earn its keep.