A Business at a Glance
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MICROSOFT CORP
MSFT
$2.8T
Mkt Cap
$381.70
+0.03%
MICROSOFT CORP (MSFT) has a current P/E ratio of 23.8, compared to its historical median P/E of 34.0. The stock is currently considered Cheap based on its historical valuation range.
MICROSOFT CORP (MSFT) has a 5-year average return on invested capital (ROIC) of 45.2%. This indicates strong capital allocation and a potential competitive advantage.
MICROSOFT CORP (MSFT) has a market capitalization of $2.8T. It is classified as a mega-cap stock.
Yes, MICROSOFT CORP (MSFT) pays a dividend with a trailing twelve-month yield of 0.91%. The company also returns capital through share buybacks, with a buyback yield of 0.78%.
Based on historical P/E analysis, MICROSOFT CORP (MSFT) appears cheap. The current P/E of 23.8 is 30% below its historical median of 34.0. The estimated fair value CAGR (P/E method) is 19.1%.
MICROSOFT CORP (MSFT) operates in the Services-Prepackaged Software industry, within the Technology sector.
MICROSOFT CORP (MSFT) reported annual revenue of $281.7 billion in its most recent fiscal year, based on SEC EDGAR filings.
Microsoft is a technology company that develops and supports a broad portfolio of software, services, devices, and solutions across three operating segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment comprises Microsoft 365 Commercial and Consumer products (Office, Windows Commercial, Teams, Exchange, SharePoint), LinkedIn's talent, marketing, sales, and premium subscription solutions, and Dynamics 365 cloud-based business applications for ERP, CRM, and supply chain management. The Intelligent Cloud segment includes Azure cloud services (infrastructure-as-a-service and platform-as-a-service consumption-based offerings), server products (SQL Server, Windows Server, Visual Studio), GitHub cloud services, and enterprise support services. More Personal Computing encompasses Windows OEM licensing, Xbox gaming hardware and content, and search advertising through Bing and Edge. Microsoft's business model combines subscription-based recurring revenue (Microsoft 365, Azure consumption, LinkedIn Premium) with transactional licensing and device sales, benefiting from three economies of scale in cloud operations: lower per-unit datacenter costs at scale, improved resource utilization through demand aggregation, and reduced application maintenance labor through multi-tenancy. The company's competitive moat derives from integrated, AI-driven security solutions across multi-cloud environments, broad model selection and developer tools, and deep enterprise customer relationships built through comprehensive platform offerings. Microsoft serves enterprises, small and medium businesses, professionals, and consumers globally, with particular strength in digital transformation and AI adoption across sectors.
【AI infrastructure scaling momentum】 Management expects continued strong demand for Azure and AI services to exceed available capacity through at least the end of fiscal 2026, driving significant capital expenditure increases to bring more GPU, CPU, and storage capacity online. Microsoft 365 Copilot adoption is accelerating with paid seats exceeding 20 million and weekly engagement reaching parity with Outlook, positioning the company to capture expanded average revenue per user through both horizontal productivity tools and targeted agentic applications. Operating margins are expected to expand despite continued investments in AI infrastructure and increased GitHub Copilot usage, reflecting efficiency gains and favorable business mix shifts toward higher-margin cloud services. Management anticipates another year of double-digit revenue and operating income growth in fiscal 2027, with operating expense growth in the mid to high single digits as the company balances ongoing R&D and AI compute investments against headcount optimization efforts.
No forward guidance provided.
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q4 FY2026 Earnings Call, Q3 FY2026 Earnings Call, Q2 FY2026 Earnings Call, Q1 FY2026 Earnings Call
| Segment | 2021 | 2022 | 2023 | 2024 | 2025 | % of Total |
|---|---|---|---|---|---|---|
Service and Other | $97.01B | $125.54B | $147.22B | $180.35B | $217.78B | 39% |
Server Products and Cloud Services | $52.59B | $67.35B | $79.97B | $97.73B | $98.44B | 17% |
Microsoft 365 Commercial Products and Cloud Services | — | — | $66.95B | $76.97B | $87.77B | 16% |
Product | $71.07B | $72.73B | $64.70B | $64.77B | $63.95B | 11% |
Gaming | $15.37B | $16.23B | $15.47B | $21.50B | $23.45B | 4% |
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 318.3B | 281.7B | 245.1B | 211.9B | 198.3B | 168.1B |
| Net Income | 125.2B | 101.8B | 88.1B | 72.4B | 72.7B | 61.3B |
| EPS | $16.85 | $13.64 | $11.80 | $9.68 | $9.65 | $8.05 |
| Free Cash Flow | 72.9B | 71.6B | 74.1B | 59.5B | 65.1B | 56.1B |
| ROIC | 32.1% | 35.8% | 39.1% | 42.0% | 57.6% | 51.5% |
| Gross Margin | 68.3% | 68.8% | 69.8% | 68.9% | 68.4% | 68.9% |
| Debt/Equity | 0.10 | 0.13 | 0.19 | 0.23 | 0.38 | 0.41 |
| Dividends/Share | $3.48 | $3.32 | $3.00 | $2.72 | $2.48 | $2.24 |
| Operating Income | 149.0B | 128.5B | 109.4B | 88.5B | 83.4B | 69.9B |
| Operating Margin | 46.8% | 45.6% | 44.6% | 41.8% | 42.1% | 41.6% |
| ROE | 30.2% | 33.3% | 37.1% | 38.8% | 43.7% | 47.1% |
| Shares Outstanding | 7,429M | 7,466M | 7,469M | 7,475M | 7,538M | 7,611M |
MICROSOFT CORP passes 7 of 9 quality checks, indicating strong fundamentals.
MICROSOFT CORP trades at 23.8x trailing earnings, compared to its 15-year median P/E of 34.0x, suggesting it is currently Cheap relative to its historical range. On a free-cash-flow basis, the stock trades at 36.6x vs a median of 30.3x. The company's 5-year average ROIC is 45.2% with a gross margin of 69.0%. Total shareholder yield (dividends + buybacks) is 1.7%. At current prices, the estimated annualized return to fair value is +11.5%.
MICROSOFT CORP (MSFT) has a net profit margin of 36.1%. This is a strong margin indicating high profitability.
MICROSOFT CORP (MSFT) generated $71.6 billion in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
MICROSOFT CORP (MSFT) has a debt-to-equity ratio of 0.13. This indicates a conservatively financed balance sheet.
MICROSOFT CORP (MSFT) reported earnings per share (EPS) of $13.64 in its most recent fiscal year.
MICROSOFT CORP (MSFT) has a return on equity (ROE) of 33.3%. This indicates the company generates strong returns for shareholders.
MICROSOFT CORP (MSFT) has a 5-year average gross margin of 69.0%. This high margin suggests strong pricing power and a potential competitive moat.
The Ledger Terminal provides 18 years of financial data for MICROSOFT CORP (MSFT), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
MICROSOFT CORP (MSFT) has a book value per share of $46.01, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management expects continued strong demand for Azure and AI services to exceed available capacity through at least the end of fiscal 2026, driving significant capital expenditure increases to bring more GPU, CPU, and storage capacity online. Microsoft 365 Copilot adoption is accelerating with paid seats exceeding 20 million and weekly engagement reaching parity with Outlook, positioning the company to capture expanded average revenue per user through both horizontal productivity tools and targeted agentic applications. Operating margins are expected to expand despite continued investments in AI infrastructure and increased GitHub Copilot usage, reflecting efficiency gains and favorable business mix shifts toward higher-margin cloud services. Management anticipates another year of double-digit revenue and operating income growth in fiscal 2027, with operating expense growth in the mid to high single digits as the company balances ongoing R&D and AI compute investments against headcount optimization efforts.