Microsoft

Microsoft sells software and cloud computing services to businesses and consumers. Its Azure platform rents computing power, storage, and AI tools to companies that need to run applications or train AI models. Its Microsoft 365 suite sells productivity software like Word and Excel, and Copilot adds an AI assistant on top of that suite. Microsoft also owns Windows, LinkedIn, GitHub, and Xbox, and it holds a large stake in OpenAI.

The market discounts Microsoft mainly because of its record AI data center spending. In the September 2026 quarter, cash spending on property and equipment was $39.4 billion, and new finance leases added $5.2 billion more. Investors fear that this spending will hold down free cash flow for years before it pays back. For the gap to close, Azure revenue growth must keep pace with the new data center capacity.

That would show that the spending buys revenue and not only cost. Under a new and narrower Azure definition, Azure revenue grew 48% in the September 2026 quarter, above the guided 44% to 45% in constant currency. Commercial remaining performance obligation grew 73% to $677 billion. Management says that Azure capacity is still smaller than demand.

Microsoft also depends less on one AI partner. OpenAI contracted to buy an additional $250 billion of Azure services, and Copilot now offers Anthropic's Claude models together with OpenAI's models. In September 2026, Microsoft added new coding and agent tools to Copilot, and Azure customers started to use OpenAI's new GPT-6 Astra model. These are signs that AI products bring paid use and not only cost.

The fiscal Q1 2027 report of October 28, 2026 showed that the spending buys revenue for now: revenue grew 19% and operating income grew 21%. The fiscal Q2 2027 report, expected in late January 2027, is the next test. If Azure keeps growing near its current pace through mid-2027, the gap can close over the next two to four quarters.

1. Oct 28, 2026Passed

   Fiscal Q1 2027 results: Azure growth versus capexAzure growth near the guided 44% to 45% in constant currency, under the new Azure definition, with stable cloud margins passes; a clear Azure slowdown while capex keeps rising fails.Outcome: Azure revenue grew 48%, above the guidance, and operating income grew faster than revenue.
2. Jan 28, 2027 · est.Pending

   Fiscal Q2 2027 results: Copilot uptake and Azure capacityAzure growth that holds near its current pace and rising paid Copilot use pass; slower Azure growth with no sign of new capacity filling fails.

Every passed and failed checkpoint across all picks

• November 4, 2026Microsoft issued $25.0 billion of senior unsecured notes in ten series, which it agreed to sell on October 29, 2026. The notes include $2.0 billion of floating rate notes due 2028 and 2029 and fixed rate notes due from 2028 to 2066, with interest rates from 4.850% to 6.350%. The largest series are $4.0 billion of 5.550% notes due 2036 and $4.0 billion of 6.250% notes due 2056.
• October 28, 2026Microsoft reported fiscal Q1 2027 results, for the quarter that ended September 30, 2026. Revenue grew 19% to $92.3 billion. Operating income grew 21% to $45.9 billion. Azure revenue grew 48% to $33.2 billion, and Microsoft Cloud revenue grew 30% to $63.9 billion. Commercial remaining performance obligation grew 73% to $677 billion. Net income was $36.6 billion and diluted EPS was $4.92. Without the effect of the OpenAI investment, EPS was $4.89, up 18%. Cash spending on property and equipment was $39.4 billion, and operating cash flow was $58.0 billion. The 10-Q shows that Microsoft now holds about 24% of OpenAI on an as-converted basis.
• October 26, 2026Anthropic filed for its initial public offering. Its S-1 shows that it committed to spend at least $44.9 billion with Microsoft between November 2026 and May 2033.

Last earnings

October 28, 2026 (8-K on sec.gov)

Next earnings

Expected about January 28, 2027. The company has not confirmed the date.

• 8-KChange of directors or officersFiled November 5, 2026 · Read it on sec.gov
• 8-KOther company newsFiled November 4, 2026 · Read it on sec.gov
• 8-KOther company newsFiled October 28, 2026 · msft-20261028
• 10-QQuarterly report for the period ended Sep 30, 2026Filed October 28, 2026 · msft-20260930
• 8-KEarnings releaseFiled October 28, 2026 · Press release and exhibits
• 8-KInvestor disclosureFiled September 2, 2026 · Read it on sec.gov
• 10-KAnnual report for the period ended Jun 30, 2026Filed July 29, 2026 · msft-20260630
• 8-KEarnings releaseFiled July 29, 2026 · Press release and exhibits
• 8-KChange of directors or officersFiled June 5, 2026 · Read it on sec.gov
• 8-KChange of directors or officersFiled May 14, 2026 · Read it on sec.gov

Every filing on SEC EDGAR (CIK 789019)

• Microsoft keeps raising capital spending in fiscal 2027. In the September 2026 quarter, it spent $39.4 billion in cash on property and equipment and added $5.2 billion of finance leases, and leases of $364.6 billion had not started yet. If Azure demand growth slows before this spending pays off, margins and free cash flow will suffer.
• Microsoft accounts for its OpenAI stake in a way that pulls OpenAI's swings between profit and loss directly into Microsoft's own reported net income each quarter. This adds volatility to Microsoft's earnings that has little to do with its core software and cloud business.
• Amazon Web Services and Google Cloud are also spending heavily on AI data centers, and compete directly with Azure for the same enterprise AI workloads. A shift in market share toward either competitor would slow Azure's growth rate.

Microsoft has the highest credit ratings, and its bond debt is small. It pays for much of its data center build-out through leases, and these leases fix a large part of future costs, even if AI demand does not hold. Read more

Yield at the current rate

0.7% (current annual rate, at today’s price)

Dividend yield

0.7% (last 12 months, at today’s price of $521.12)

Paid per share

$3.64 in the last 12 months (4 payments)

Current annual rate

$3.64 ($0.91 × 4 a year)

Payout ratio

20% of the last fiscal year’s earnings (the year that ended June 30, 2026)

Latest ex-dividend date

August 20, 2026, $0.91 per share

Dividends per share by year

From 2020 to 2025, the dividend grew by about 10.2% a year. From 2015 to 2025, the dividend grew by about 10.2% a year.

Source: company filings and market data, read on November 13, 2026. The ex-dividend date is the first day a buyer no longer gets the next payment.