Microsoft holder won't sell a share as revenue hits $331.8 billion

The author's case rests on a shift that took a decade to play out. When he bought in 2016, Microsoft was a PC-centric software company with $85.3 billion in fiscal 2016 revenue and $20.2 billion in operating income. By fiscal 2026, revenue reached $331.8 billion and operating income $155.2 billion, with most of that expansion coming from selling more cloud products, like Azure and Microsoft 365, to largely the same enterprise customer base.

The newer chapter is AI. In the fourth quarter of fiscal 2026, Azure and other cloud services revenue grew 43%, Microsoft 365 Copilot passed 30 million paid seats, and commercial remaining performance obligations rose 84% to $678 billion. Microsoft Cloud revenue rose 27% to $59.3 billion, and roughly 90% of full-year Microsoft Cloud revenue came from customers outside frontier model companies, which the author reads as a broad base rather than reliance on a few large AI labs.

What remains open is whether that demand turns into adequate returns on the capital being committed. Microsoft's $115.9 billion of property and equipment spending in fiscal 2026, up 80%, is the figure the author keeps coming back to. The outcome hinges on whether earnings keep growing at a double-digit rate, in which case today's multiple looks less demanding over time — a possibility, not a certainty, and the reason he says he adds on weakness instead of chasing the stock.