Key Points
Microsoft's cloud growth is accelerating.
Unlike some of its peers, Microsoft continues to generate bountiful free cash flow.
- 10 stocks we like better than Microsoft ›
Shares of Microsoft (NASDAQ: MSFT) rose nearly 22% this past week after the tech titan reported impressive artificial intelligence (AI)-fueled growth metrics.
Image source: Getty Images.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Cloud gains
Microsoft's revenue jumped 18% year over year to $90 billion in its fiscal 2026 fourth quarter, which ended on June 30.
The gains were driven by the stunning performance of its cloud infrastructure platform, Azure, which saw sales soar 43%. CEO Satya Nadella said Azure's annual revenue topped $100 billion for the first time in fiscal 2026.
AI features are boosting sales of Office apps
Microsoft's productivity and business processes division also saw solid gains, with revenue rising 14% to $37.8 billion in the fourth quarter.
Nadella highlighted the growth of the company's AI assistant for its popular office apps Word, Excel, and Teams.
"Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation," Nadella said.
Microsoft remains incredibly profitable
All told, the software maker's adjusted net income climbed 22% to $35.3 billion, or $4.74 per share. That handily surpassed Wall Street's estimates, which had called for per-share profits of $4.24.
Investors were also relieved to hear that Microsoft expects to remain free cash flow positive in fiscal 2027, even as the company ramps up its investments to meet the booming demand for its AI services.
Should you buy stock in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!*
Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of August 2, 2026.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
