Discipline and Demand Are Why I’ll Keep Buying Microsoft After Its Blowout Quarter

I bought much Microsoft (NASDAQ:MSFT) the greeting aft fiscal Q4 landed, and I would deed the fastener again tomorrow. This is simply a presumption I support adding to, and the July 29, 2026 study is precisely why. Investors walked successful braced for a capex fig that would stroke the exemplary up. CFO Amy Hood did the opposite. She revised calendar capex guidance down to astir $175 cardinal from susurration numbers adjacent $190 billion. The banal roseate 15.51% successful 1 session. My condemnation comes from what that determination reflected: subject gathering demand.

Start with the demand. Azure grew 43% twelvemonth implicit twelvemonth and absorption guided 45% for adjacent quarter, meaning endeavor unreality AI spending is inactive expanding. Azure crossed $100 cardinal successful yearly gross for the archetypal time. Commercial remaining show obligations, the contracted enactment sitting connected the books awaiting recognition, deed $678 billion, up 84% twelvemonth implicit year. Microsoft 365 Copilot passed 30 cardinal paid seats. When Satya Nadella talks astir "the assurance customers are placing successful america to powerfulness their AI transformation," the RPO fig is the receipt.

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Now the discipline. Q4 gross landed astatine $90.01 billion, up 17.75%, beating estimates by 2.71%. Non-GAAP EPS printed $4.74 against a $4.24 estimate, an 11.81% beat, and the 5th consecutive one. Full-year operating income reached $155.24 billion, up 20.78%, nett income $133.75 billion, up 31.34%, and operating currency travel $182.94 billion, up 34.35%. Return connected equity is 34.04%. Interest sum sits astatine 50.88x. Debt to equity is 0.29. This institution generates capable currency internally to money a $115.95 cardinal capex programme portion returning $12.7 cardinal to shareholders successful a azygous 4th done dividends and buybacks.

Which brings maine to wherefore my wealth keeps flowing present alternatively of into Amazon oregon Alphabet, the 2 names a scholar would scope for first. I person looked astatine both. I support coming backmost due to the fact that Microsoft has already handed maine what I privation a hyperscaler to prove: contracted aboriginal gross of $678 billion, Azure accelerating from 43% to a 45% guide, and a CFO consenting to trim the capex inquire erstwhile the exemplary tightens. Polymarket traders presently springiness Microsoft a 53.5% probability of holding a higher valuation than Anthropic and OpenAI combined by year-end. I dainty that arsenic the easier broadside of the bet.