The start of 2026 has felt a little shaky, at least on the stock screens—mostly because investors can’t stop worrying about big-picture stuff. Two fears keep coming up: whether artificial intelligence will displace software, and whether companies will actually earn a solid return on the money they’re pouring into AI infrastructure.
That’s the trouble spot for Microsoft. Misryoum newsroom reporting frames it as sitting right at the intersection of both market worries. The stock hasn’t exactly helped either: it’s up 5.29% on the day to $413.90, but it’s still down more than 20% year to date as of this writing. The market cap is $2.9T, with a day range of $396.73 to $414.36 and a 52-week range of $355.67 to $555.45. Volume is 1.7M with average volume at 37M, and you’ve got a gross margin of 68.59% plus a dividend yield of 0.89%.
Misryoum editorial desk noted that Microsoft wasn’t spared in the SaaS stock sell-off. And then, on top of that, the stock has been in the crosshairs over AI infrastructure spending—because Azure has been its biggest growth driver. But there’s another complication: unlike cloud rivals Alphabet and Amazon, Microsoft is behind on the custom chip front. That puts Azure at a disadvantage, at least in how investors are thinking about the race to build the most efficient AI compute.
So what’s the story behind the numbers? Last quarter, Microsoft’s fiscal Q2 revenue climbed 17% year over year to $81.3 billion, while adjusted earnings per share rose 24% to $4.14. Azure led the growth, with revenue growth jumping 39%. The stock, meanwhile, has gone nowhere over the past year—down modestly—despite those strong revenue and earnings trends. It’s the kind of mismatch that makes people glance at charts, then glance away. (Like, literally—someone in the office can hear a keyboard clacking while the charts load, and then everyone starts pretending they’re not worried.)
Should you buy Microsoft stock after the correction, or run for the hills? Misryoum analysis indicates there’s a bullish argument that’s hard to ignore. Microsoft 365 is deeply embedded in enterprise workflows, and the company is seeing strong growth from the adoption of its AI-assistant copilots. The idea here isn’t that Microsoft always has the absolute best product on paper—more that it’s difficult to displace something so ingrained, especially once you layer in security features on top of existing habits. Even the introduction of the cheaper Google Workplace did little to dent Microsoft’s enterprise software momentum.
At the same time, Microsoft comes with the usual “but” clauses. It has a large backlog in cloud computing: $625 billion in commercial remaining performance obligations (RPOs). Misryoum newsroom reporting adds that it came after adding $250 billion in commitments from OpenAI when it agreed to restructure its investment in the large language model maker. It also still holds a more than 25% stake in that company and intellectual property rights to its LLMs and products through 2032. That’s a big runway—though, honestly, whether investors believe the runway converts into durable, high-return growth is the whole question.
Then there’s valuation, which is where the decision starts to feel more practical. After the stock dip, Microsoft trades at a forward P/E of 20 times fiscal 2027 analyst estimates. Misryoum editorial desk frames that as solid value, but still not automatically a screaming bargain. The same analysis suggests there are better stocks to consider in cloud computing (Alphabet and Amazon) and SaaS spaces. And just like that, the “buy or run” debate loops back—because even with the numbers looking decent, expectations in this market are… not exactly patient.
(And, a quick note: Geoffrey Seiler has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.)
Ronaldo gets good news as Martinez returns to Al Nassr training