Microsoft Had Its Best Quarter in 28 Years. Is it Too Late to Buy the Stock?
Perhaps some investors wrote off the company too soon.
Microsoft's stock experienced its best quarter in 28 years during the third quarter of the year, with shares rising nearly 38%, marking its best performance since 1998. The company's strong results were driven by its AI and cloud computing businesses, dispelling concerns that services would be displaced by AI. Microsoft's fiscal year 2026 ended on June 30, and the company's fourth-quarter report exceeded analyst estimates.
Revenue grew by 18% year-over-year to $90 billion, while operating income increased by 18% to $40.6 billion, and non-GAAP earnings per share climbed 23% to $4.74. AI and cloud services were key contributors to this success, with Azure revenue reaching $100 billion for the first time in the company's fiscal year 2026 and Microsoft 365 Copilot achieving over 30 million paid seats.
Microsoft's strong position in cloud computing and its focus on AI, including its in-house developed chips, suggest the investment in the stock is justified. With a forward earnings multiple of 25.1x, which is higher than the average for the IT sector, Microsoft presents a compelling buy opportunity.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
