Microsoft Corporation (MSFT) AI Stock Analysis

Microsoft Corporation offers software, services, devices, and solutions worldwide across three primary operating segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes division delivers Office, Exchange, SharePoint, Microsoft Teams, Skype for Business, and Dynamics 365 business applications. Intelligent Cloud provides server products and cloud infrastructure services, including Azure, SQL, Windows Server, Visual Studio, System Center, GitHub, and Nuance. The More Personal Computing division encompasses Windows licensing, patent licensing, and devices such as Surface PCs.

Microsoft expanded revenue from $198.27B in FY2022 to $331.84B in FY2026, achieving a 5-year revenue CAGR of 14.6% from FY2021 to FY2026. Annual revenue growth improved from 6.9% in FY2023 to 17.8% in FY2026. Gross margin stood at 67.9% in FY2026, while operating margin expanded to 46.8%. Net income reached $133.75B in FY2026, delivering diluted EPS of $17.89. In the latest quarter ended June 30, 2026, quarterly revenue grew 17.7% year-over-year, and quarterly earnings expanded by 31.7%. Research and development expense totaled $35.56B in FY2026.

As of June 30, 2026, Microsoft held $76.84B in cash and short-term investments against total debt of $128.81B, leaving net debt at $51.97B. Total assets stood at $758.38B against shareholders' equity of $442.39B. Liquidity remained sound with a current ratio of 1.23 and a debt-to-equity ratio of 0.29. In FY2026, operating cash flow was $182.94B, while free cash flow reached $66.99B. Capital allocation included $115.95B in capital expenditures, $22.27B in share buybacks, and $26.45B in dividends paid.

At a last close of $529.05, Microsoft carried a market cap of $3.93T and an enterprise value of $3.70T. The stock traded at a trailing P/E of 29.5x and a forward P/E of 25.1x, compared to the median of its Nasdaq-100 Technology peers of 43.3x trailing and 25.7x forward. Its price-to-sales of 11.8x and EV/EBITDA of 17.7x were also below the median of its Nasdaq-100 Technology peers of 12.4x and 32.8x. Over the past year, the stock returned 4.3%, trailing the S&P 500 (SPY) return of 16.8%.

Microsoft pays a quarterly dividend with an annualized forward payout of $3.92 per share, yielding 0.74%. The dividend payout ratio stands at 20.3%. The company has paid consecutive dividends for 24 years, generating a 5-year annualized dividend growth rate of 10.2%. Its last ex-dividend date is listed as November 19, 2026.

Wall Street coverage includes 40 Strong Buy, 13 Buy, and 3 Hold ratings, with zero Sell or Strong Sell ratings. The mean price target of $599.24 implies an upside of 13.3% versus the last close of $529.05. For the fiscal year ending June 30, 2027, consensus estimates project EPS of $19.78 on revenue of $391.35B. The company beat EPS estimates in each of the last 4 quarters, with its next earnings release scheduled for October 28, 2026.

This page is an AI-written research summary of Microsoft Corporation (MSFT). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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