3 weeks ago
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Prosper Junior Bakiny, The Motley Fool
Mon, August 3, 2026 astatine 8:35 AM CDT 3 min read
Microsoft (NASDAQ: MSFT) has not performed good this year. Investors are disquieted that artificial quality (AI) volition regenerate galore of the company's services, a sentiment that has enactment downward unit connected overmuch of the bundle industry. Meanwhile, the company's dense investments successful AI whitethorn pb to little profits and margins, oregon truthful the statement goes. However, Microsoft proved immoderate doubters incorrect with its latest net report, for the 4th fourth of its fiscal twelvemonth 2026, which ended connected June 30.
The company's gross accrued by a steadfast 18% twelvemonth implicit twelvemonth to $90 billion, and adjacent with monolithic AI investments, adjusted net per stock climbed 23% twelvemonth implicit twelvemonth to $4.74. Microsoft's banal soared by 15% pursuing its quarterly update, but determination is 1 cardinal crushed -- oregon respective 100 cardinal -- wherefore determination whitethorn beryllium much upside ahead. Here's what investors request to know.
Missed Nvidia successful 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" awesome flashed for a little-known chipmaker called Nvidia. For the archetypal clip successful years, that aforesaid "Total Conviction" awesome is flashing for a institution 1/100th the size of Nvidia. Continue »
Microsoft Cloud for the triumph
Microsoft's unreality computing concern was, erstwhile again, the prima of the show. Microsoft Cloud's income jumped 27% twelvemonth implicit year, portion Azure gross accrued by 43%. This conception should proceed driving maturation for the foreseeable future. How bash we cognize that? The institution reported a unreality backlog of $678 cardinal arsenic of the extremity of the quarter, up 84% twelvemonth implicit year. This provides the tech person with important visibility into sustained request and maturation successful its unreality business.
Also, Microsoft's AI-related investments are intelligibly having a affirmative interaction connected the business, adjacent beyond driving meaningful unreality growth. Consider Microsoft Copilot, an AI adjunct integrated crossed the company's apps and productivity suite that helps users automate tasks and amended productivity. Microsoft said that Microsoft 365 Copilot has 30 cardinal paid seats (or progressive paid subscriptions), with nett paid subscription adds much than doubling 4th implicit quarter.
This provides further grounds that, alternatively than being replaced by AI, Microsoft is evolving with the exertion by launching AI-powered services to marque its customers' lives easier, and they are buying what the institution is selling. Microsoft is dispelling immoderate of the fears investors person had precocious and showing that its semipermanent concern thesis remains strong. We haven't adjacent touched connected different aspects of the business, including its reliable income programme and rock-solid equilibrium sheet.
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