Jim Cramer Wondered Whether Microsoft Corporation (NASDAQ:MSFT) Isn’t “That” Dependent On AI

Jim Cramer expressed doubt on whether Microsoft Corporation (NASDAQ:MSFT) is overly reliant on AI for driving its stock performance. The company's shares experienced a significant increase of over 20% since late July following its second quarter earnings on July 29th. Microsoft's AI business, primarily under its Azure platform, seems to be the primary focus in the company's narrative.

During a morning appearance on September 3rd, Cramer discussed the firm's recent decision to report Azure revenue quarterly, stating that this move offers more clarity and indicates that the company is not excessively dependent on OpenAI. Azure's revenue grew by 42% to $29.42 billion in the June quarter, marking a substantial increase and reaching $100 billion annually for the first time.

The company also guided Azure revenue growth to sit between 44% and 45% for the current quarter, surpassing Microsoft's broader revenue growth in the fourth quarter by a significant margin. However, sustaining this growth comes with a hefty price tag, with Microsoft's capital expenditure totaling $115.9 billion for FY26 and $35.4 billion in Q4, excluding financial leases.

Despite the bullish sentiment surrounding Microsoft's AI tailwinds, driven by the company's Copilot seats surpassing 30 million, with double-digit sequential net new additions, the company might face challenges in maintaining this growth level in the current fiscal year. Hedge fund sentiment has shifted slightly, with 273 out of 1,006 funds tracked by Insider Monkey holding a stake in Microsoft Corporation (NASDAQ:MSFT) in Q2, down from 282 out of 1,022 in Q1.

Notable exits include Two Sigma Advisors and TCI Fund Management. Comparatively, Microsoft's forward P/E ratio of 24.81 is marginally higher than Amazon's 23.64 and Google's 22.