By Vandita Jadeja
Publication Date: 2026-05-19 17:31:00
Quick Read
Microsoft (MSFT) posted Q3 FY26 earnings of $4.27 EPS (beating $4.07 expected) with $82.89B revenue up 18.3% YoY, while AI business surged to $37B annualized run rate (up 123% YoY) and commercial remaining performance obligations nearly doubled to $627B.
Massive capex spending of $30.88B in the quarter (up 84% YoY), rising Treasury rates at 4.59%, and widening OpenAI investment losses to $3.1B are suppressing Microsoft’s valuation despite strong Azure growth at 40% for four straight quarters and insider selling at lower prices.
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At $420, Microsoft (NASDAQ:MSFT) screens as compelling for research. The stock has slid 12.22% year to date even as the AI business surged past a $37 billion annualized run rate, up 123% year over year, creating an unusual gap between price action and fundamentals.
Microsoft sits at the center of the…
