Buy Microsoft Stock

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Buy Microsoft Stock

Should You Buy Microsoft Stock?

It's safe to say that Microsoft had a rough year in the stock market. Although the stock managed to stage a recovery, it is still down on a YTD basis.

So, it is only natural to wonder if one should buy the Microsoft stock or if it is better to wait. To better understand this, we must take a closer look at Microsoft's results.

Microsoft's Revenue Is Up By 18% Y/Y

The Q3 FY2026 results showed that the total revenue of Microsoft was $82.9 billion. That's an 18% y/y increase, which is quite good.

The operating income of Microsoft is also up by 20% and was recorded at $38.4 billion. The EPS jumped by 23% and touched $4.27.

On the surface, Amazon's cloud segment showed strong growth. But if we look at it on a constant-currency basis, the growth has been flat for three quarters in a row.

On the other hand, Google Cloud's growth was 63% y/y during Q1. This clearly highlights that Google Cloud is slowly increasing its market share!

Another issue with Microsoft is that its backlog is now sitting at $627 billion. That's a good thing, but the issue is that most of it is from just one company called OpenAI. This creates a concentration risk, and the investors are not taking it well.

Normally, a backlog that big should come from multiple customers. But in this case, a big chunk is from OpenAI, and that's a major issue for Microsoft.

The P/E ratio of Microsoft is only 25, which is quite reasonable. So, while the uncertainty may be high, there's no doubt that Microsoft stock is a very good option in the tech sector.

For investors who have no issue with some uncertainty and risks, the Microsoft stock is a good fit. But for those who want to minimize the risk, it is better to wait until the situation improves for Microsoft.

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