By Daniel Sparks
Publication Date: 2026-08-26 16:38:00
Microsoft (MSFT +0.48%) has just reported what was possibly one of the best years in its history. In fiscal 2026 (the year ended June 30), revenue rose 18% to $331.8 billion, and net income grew 31% to $133.7 billion.
The stock, however, did not follow the same path. Microsoft’s market cap, at about $3.59 trillion as of this writing, sits about 4.5% below where it was a year ago.
How did this happen? The market put a different price on earnings. A year ago, investors paid about 37 times earnings for Microsoft. Today they pay about 27 times earnings.
Put another way, the business grew nearly a third, yet the price of each dollar of its earnings fell more or less by the same proportion.
So, exactly what did the market stop paying for?
Image source: Getty Images.
The business did its part
Whatever the answer, it is not headline results. Revenue growth held at 18% for the full year and again at 18% in the fourth quarter. Azure revenue topped $100 billion for the fiscal year, up 41%,…
