Microsoft Corporation (MSFT)
Microsoft retains high recurring revenue quality from enterprise cloud and productivity suites. Near-term operating leverage remains healthy despite elevated AI infrastructure spend.
This page preserves the published note at the report date shown below. For the live workspace with the latest price context, filing updates, refreshed normalized statements, and current model output, return to the company page.
Live reference context
These cards show the latest live reference data beside the published note. The written note and published rating remain anchored to the report date above.
Current model signal
Buy
Confidence
Medium
Current price
$432
Latest analyst action
Reiterated
Mar 14, 2026
Latest published rating
Buy
Mar 14, 2026
Fair value
$468
Upside / Downside
+8.3 upside
Current price data
AnalystScope curated current price
Live market-price fetch unavailable. Using the curated current price field.
Latest filing / report
SCHEDULE 13G/A filed Mar 27, 2026
Last refreshed Apr 4, 2026, 3:58 AM UTC. Stale after Apr 4, 2026, 3:58 PM UTC.
Open filing sourceReported fundamentals
SEC XBRL companyfacts API
Live SEC companyfacts currently cover revenue, operating margin, free cash flow, and net cash / net debt. Reporting period end 2025-06-30.
Last refreshed 4 Apr 2026, 03:32 UTC. Stale after 4 Apr 2026, 15:32 UTC.
Analyst summary
Microsoft retains high recurring revenue quality from enterprise cloud and productivity suites. Near-term operating leverage remains healthy despite elevated AI infrastructure spend.
Why this view
- Valuation implies 8.3% upside to fair value.
- Operating trends show +14.9% revenue growth with 45.6% operating margin.
- Cash-flow quality shows 25.4% FCF margin.
- Balance sheet remains net cash positive at $51.4B, equal to 18.2% of revenue.
What to watch
Whether Azure demand stays broad-based rather than concentrated in a few AI workloads.
Thesis scorecard
Lightweight qualitative scorecard across the core dimensions shaping the current investment view.
Growth
StrongCloud and AI demand continue to support an above-market growth profile.
Profitability
StrongHigh recurring software mix supports durable operating leverage.
Balance sheet
StrongNet cash and liquidity provide flexibility for ongoing investment.
Valuation
ModeratePremium quality is reflected in the multiple despite still-positive upside.
Execution / Resilience
StrongEnterprise product breadth and retention make execution more resilient.
Bull / Base / Bear scenarios
Bull case value
$522
Stronger execution and valuation support than the base case.
Base case value
$468
This is the main recommendation anchor used on the public company page.
Bear case value
$414
Weaker assumptions or lower multiple support than the base case.
Base-case assumptions
These are the published base-case assumptions behind the note. They are reasoned valuation inputs at the report date, not reported facts, and the note under each number explains why that level was used in the base case.
Revenue CAGR (5Y)
11.0%
±1.0% => ±$22/sh
Why this level: This is AnalystScope's base-case growth assumption, not a guarantee. It sits below the latest normalized FY revenue pace (2025.0%), so the model does not extend current strength too far into the outer years. Current company context: Azure and broader Microsoft Cloud remain the primary incremental growth engine.
Terminal Growth
3.0%
±0.5% => ±$18/sh
Why this level: This is AnalystScope's mature long-run growth assumption, not a perpetual hypergrowth claim. At 3.0%, it sits well below the 11.0% five-year revenue CAGR, so the model steps down from the explicit forecast period to a steadier long-run pace. For Microsoft Corporation, that means a durable franchise can keep compounding after year five without assuming today's faster growth profile lasts indefinitely.
WACC
8.2%
±0.5% => ∓$24/sh
Why this level: This is AnalystScope's base-case cost-of-capital judgment, not a precise CAPM output. It reflects the current rates backdrop, equity risk premium, and the company's balance-sheet posture. Cash-rich balance sheet
Operating Margin (Year 5)
45.0%
±100 bps => ±$15/sh
Why this level: This is AnalystScope's base-case margin view, not a promise of straight-line expansion. It keeps year-five margins close to today's normalized operating margin (45.6%), which implies the current margin structure is broadly durable. Margin input smooths the current AI infrastructure spend cycle and strips temporary noise.
How to read the assumptions and sensitivities
These are base-case assumptions used to estimate fair value. They are reasonable model inputs, not reported facts.
Each sensitivity line shows the estimated fair-value-per-share change from a small move in that one input while the other inputs stay fixed.
bps means basis points. 100 bps equals 1.00 percentage point.
WACC sensitivity moves in the opposite direction because a higher discount rate lowers present value, while a lower discount rate raises it.
Model inputs vs reported fundamentals
Side-by-side view of the live reported fundamentals versus the latest normalized annual inputs still used in the current public analysis model.
Reported fundamentals source
SEC XBRL companyfacts API
Live SEC companyfacts currently cover revenue, operating margin, free cash flow, and net cash / net debt. Reporting period end 2025-06-30.
Last refreshed 4 Apr 2026, 03:32 UTC. Stale after 4 Apr 2026, 15:32 UTC.
Normalization impact on the thesis
These normalization choices make the Microsoft view somewhat more conservative on near-term margin volatility while keeping the thesis anchored to recurring cash generation.
| Metric | Reported | Status | Model input | Status |
|---|---|---|---|---|
| Revenue (TTM) | $281.7B | Live reported | $281.7B +14.9% YoY Adjustment: Model revenue smooths short-term enterprise deal timing and AI-related pull-forwards. | Model / normalized |
| Operating Margin | 45.6% | Live reported | 45.6% +102 bps YoY Adjustment: Margin input smooths the current AI infrastructure spend cycle and strips temporary noise. | Model / normalized |
| FCF (TTM) | $71.6B | Live reported | $71.6B 25.4% margin Adjustment: FCF input normalizes working-capital timing and cloud infrastructure cash swings. | Model / normalized |
| Net Cash / (Debt) | ($16.0B) | Live reported | $51.4B Cash-rich balance sheet Adjustment: Balance-sheet input applies a conservative net-cash view after strategic cash and obligations. | Model / normalized |
Why this rating
Shares currently trade at $432 versus a base-case fair value of $468, implying +8.3 upside. That supports a Buy rating with Medium confidence under the current model.
Fair value $468 vs. current $432 (+8.3 upside).
Current price
$432
Fair value
$468
Upside / Downside
+8.3 upside
Model signal / Confidence
Buy / Medium
Confidence framing
Method agreement / dispersion
Valuation methods show a wider range from $444 to $527, which tempers conviction.
Margin strength
Operating margin is 45.6%, with +102 bps vs prior FY.
Balance sheet position
Balance sheet positioning remains net cash positive at $51.4B, with cash-rich balance sheet.
Valuation breakdown
| Method name | Implied value | Weight |
|---|---|---|
| DCF (Base) | $444 | 50% |
| NTM P/E Multiple | $468 | 30% |
| EV/EBITDA Cross-check | $527 | 20% |
Key drivers
Azure and broader Microsoft Cloud remain the primary incremental growth engine.
Recurring Office, Dynamics, and security revenue supports durable operating leverage.
A strong balance sheet preserves flexibility to fund AI investment without stressing returns.
Key risks
AI infrastructure spend could outpace monetization and pressure near-term returns.
Slower enterprise workload growth would likely moderate Azure expectations.
Platform or antitrust scrutiny could limit bundling leverage across the stack.
What would change our view
A material Azure deceleration beyond current base-case assumptions would reduce conviction.
Clear evidence of AI monetization driving sustained margin expansion would improve our view.
Further capex escalation without visible payback would make the rating harder to defend.
Near-term catalysts
Quarterly Azure growth and AI attach commentary remain the nearest catalyst for estimate revisions.
Commercial seat expansion and renewal trends can support a cleaner margin read-through.
Capex and monetization disclosure around AI services could shift the market's payback expectations.
What we are watching
Whether Azure demand stays broad-based rather than concentrated in a few AI workloads.
How quickly AI revenue begins to offset the current infrastructure investment cycle.
Any sign that enterprise spending discipline is slowing broader cloud adoption.
Coverage metadata
Last updated
Mar 14, 2026
Coverage status
Active coverage
Latest analyst action
Reiterated
Mar 14, 2026
Latest published rating
Buy
Mar 14, 2026
Analyst note
Monitoring Azure demand durability and AI infrastructure payback across enterprise workloads.
Current price source
AnalystScope curated current price
Live market-price fetch unavailable. Using the curated current price field.
Reported fundamentals source
SEC XBRL companyfacts API
Live SEC companyfacts currently cover revenue, operating margin, free cash flow, and net cash / net debt. Reporting period end 2025-06-30.
Last refreshed 4 Apr 2026, 03:32 UTC. Stale after 4 Apr 2026, 15:32 UTC.
Latest filing source
SEC EDGAR submissions API
SCHEDULE 13G/A filed Mar 27, 2026
Last refreshed Apr 4, 2026, 3:58 AM UTC. Stale after Apr 4, 2026, 3:58 PM UTC.
Open filing sourceCoverage timeline
Timeline entries reflect published analyst actions and ratings. The current model signal is shown separately above.
Mar 14, 2026
Maintained the Buy view as Azure checks and AI demand stayed supportive.
Feb 6, 2026
Moved to Buy as cloud demand durability and margin support improved.
Dec 12, 2025
Initiated coverage with a balanced initial view on AI spending versus monetization.