Meta Platforms Is Now 1 of Microsoft’s Biggest Customers. What That Means for MSFT Stock.

Meta Platforms, the parent company of Instagram and Facebook, has emerged as one of Microsoft's largest customers. This is according to recent reports suggesting Meta processes trillions of tokens each week through Microsoft's Foundry platform. Furthermore, Meta spends hundreds of millions of dollars annually on AI models via Microsoft's Azure cloud service.

What's particularly intriguing is Meta's heavy reliance on Azure, despite its own extensive investment in AI technologies. This reliance highlights the necessity of external cloud infrastructure to manage escalating AI workloads, even for industry titans. Microsoft's Foundry marketplace offers a single platform for accessing AI models from various providers, with 100,000 customers as of July, underscoring the expanding demand for Microsoft's AI ecosystem.

As of the fourth quarter of fiscal 2026, Microsoft reported a revenue increase of 18% year-over-year to $90.01 billion, surpassing analysts' estimates. Azure's full-year revenue hit the $100 billion mark for the first time, growing 41% year-over-year. This surge in Azure's revenue places Microsoft among the leading cloud infrastructure providers, trailing only Amazon's AWS and Google Cloud.

Microsoft's Productivity and Business Processes segment, which includes Office, Dynamics, and LinkedIn, saw a 14% year-over-year revenue growth. Additionally, Microsoft 365 Copilot, a productivity tool, has garnered over 30 million paid seats. Despite a 4% decline in More Personal Computing, Microsoft's weakest segment in the quarter, the company remains optimistic about its future.

Management anticipates double-digit revenue and operating income growth in fiscal 2027, although operating expenses are expected to rise slightly. Analysts' outlook for Microsoft stock is generally positive, with a consensus "Strong Buy" rating. Microsoft's shares, currently priced at 24.6 times forward earnings and 10.8 times sales, have a potential upside of 13% from the average price target of $554.76.